Rep(s). By Representative Poole


HB250

ENROLLED, An Act,

Relating to business entities; to add Chapter 2A to Title 10A, consisting of Sections 10A-2A-1.01 to 10A-2A-17.06, inclusive, to the Code of Alabama 1975, substantially revising the Alabama Business Corporation Law to reflect the national standards set by the Model Business Corporation Act of 2016 and the Delaware General Corporation Law; to amend Sections 10A-1-1.02, 10A-1-1.03, 10A-1-1.08, 10A-1-1.12, 10A-1-3.05, 10A-1-3.06, 10A-1-3.32, 10A-1-3.42, 10A-1-4.01, and 10A-1-4.02, Code of Alabama 1975, as amended by Act 2018-125; to amend Sections 10A-1-4.04, 10A-1-4.06, 10A-1-4.11, 10A-1-4.13, 10A-1-4.15, 10A-1-4.21, 10A-1-4.23, and 10A-1-4.24, Code of Alabama 1975; to amend Section 10A-1-4.25, Code of Alabama 1975, as amended by Act 2018-125; to amend Section 10A-1-4.26, Code of Alabama 1975; to amend Sections 10A-1-4.31, 10A-1-5.01, and 10A-1-5.08, Code of Alabama 1975, as amended by Act 2018-125; to amend Section 10A-1-6.01, Code of Alabama 1975; to amend Sections 10A-1-6.02, 10A-1-7.01, 10A-1-7.04, and 10A-1-7.11, Code of Alabama 1975, as amended by Act 2018-125; to amend Section 10A-1-7.21, Code of Alabama 1975; to amend Sections 10A-1-7.31, 10A-1-8.01, and 10A-1-8.02, Code of Alabama 1975, as amended by Act 2018-125; to amend Sections 10A-1-8.04, 10A-1-9.01, 10A-4-2.02, 10A-4-4.01, 10A-4-4.02, 10A-4-5.01, 10A-4-5.04, 10A-5A-10.01, 10A-5A-10.03, 10A-5A-10.04, 10A-5A-10.05, and 10A-5A-10.07, Code of Alabama 1975; to amend Section 10A-5A-10.08, Code of Alabama 1975, as amended by Act 2018-125; to amend Sections 10A-8A-9.02, 10A-8A-9.04, 10A-8A-9.05, 10A-8A-9.06, 10A-8A-9.08, and 10A-8A-9.09, as added to the Code of Alabama 1975 by Act 2018-125; to amend Sections 10A-9A-10.02, 10A-9A-10.04, 10A-9A-10.05, 10A-9A-10.06, and 10A-9A-10.08, Code of Alabama 1975; to amend Section 10A-9A-10.09, Code of Alabama 1975, as amended by Act 2018-125; to amend Sections 10A-10-1.09, 10A-10-1.12, 10A-10-1.15, 10A-10-1.16, 10A-11-1.01, 10A-11-1.03, 10A-11-1.04, 10A-11-1.06, 10A-11-1.12, 10A-30-2.01, 10A-30-2.03, 10A-30-2.04, 10A-30-2.05, 10A-30-2.06, 10A-30-2.09, 10A-30-2.12, and 10A-30-2.13, Code of Alabama 1975, to make conforming changes throughout the Alabama Business and Nonprofit Entity Code in order to effectuate the changes to the Alabama Business Corporation Law and conform with the other entities governed by the Alabama Business and Nonprofit Entity Code; and to repeal Chapter 2 of Title 10, consisting of Sections 10A-2-1.01 to 10A-2-17.02, inclusive, Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Chapter 2A, commencing with Section 10A-2A-1.01, is added to Title 10A of the Code of Alabama 1975, as follows:

ARTICLE 1. GENERAL PROVISIONS.

Division A. SHORT TITLE.

§10A-2A-1.01. Short title.

(a) This chapter and the provisions of Chapter 1, to the extent applicable to business corporations, shall be known and may be cited as the Alabama Business Corporation Law.

(b) This chapter and the provisions of Chapter 1, to the extent applicable to business corporations, apply to a corporation incorporated and existing under this chapter or any predecessor law regarding business corporations, and to a foreign corporation that is transacting business in this state, regardless of whether the foreign corporation is registered to transact business in this state. Without in any way limiting the generality of any provision of this chapter or of any provision of Chapter 1, this chapter and the provisions of Chapter 1, to the extent applicable to corporations, shall apply to banks, trust companies, savings and loan associations, insurance companies, public utilities, and railroad companies, except to the extent, if any, that any provision of this chapter or of Chapter 1 is inconsistent with other statutes of this state specifically applicable to those entities.

Division B. FILING DOCUMENTS.

§10A-2A-1.20. Requirements for filing instruments; extrinsic facts.

(a) Whenever any filing instrument is to be filed with the Secretary of State or in accordance with this chapter, such instrument shall be executed as follows:

(1) Except as provided in subsection (3), the certificate of incorporation, and any other instrument to be filed before the election of the initial board of directors if the initial directors were not named in the certificate of incorporation, shall be signed by the incorporator or incorporators or the successors and assigns of the incorporator or incorporators. If any incorporator is not available then any other instrument may be signed, with the same effect as if the incorporator had signed it, by any person for whom or on whose behalf the incorporator, in executing the certificate of incorporation, was acting directly or indirectly as employee or agent, provided that the other instrument shall state that the incorporator is not available and the reason therefor, that the incorporator in executing the certificate of incorporation was acting directly or indirectly as employee or agent for or on behalf of the person, and that the person's signature on the instrument is otherwise authorized and not wrongful.

(2) Except as provided in subsection (3), all other filing instruments shall be signed:

(i) by any authorized officer of the corporation; or

(ii) if it shall appear from the filing instrument that there are no such officers, then by a majority of the directors or by such directors as may be designated by the board of directors; or

(iii) if it shall appear from the filing instrument that there are no such officers or directors, then by the holders of record, or such of them as may be designated by the holders of record, of a majority of all outstanding shares of stock; or

(iv) by the holders of record of all outstanding shares of stock.

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

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

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

(1) The manner in which the facts will operate upon the terms of the plan or filing instrument must be set forth in the plan or filing instrument.

(2) The facts may include:

(i) any of the following that are available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or 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 filing instrument; or

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

(3) As used in this subsection (c), "plan" means a plan of conversion, merger, or share exchange.

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

(i) the name and address of any person required in a filing instrument;

(ii) the registered office of any entity required in a filing instrument;

(iii) the registered agent of any entity required in a filing instrument;

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

(v) the effective date and time of a filing instrument as determined under Article 4 of Chapter 1; and

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

(5) If a provision of a filing instrument is made dependent on a fact ascertainable outside of the filing instrument, and that fact is neither ascertainable by reference to a source described in subsection (c)(2)(i) or a document that is a matter of public record, nor have the affected stockholders received notice of the fact from the corporation, then the corporation shall file with the Secretary of State a certificate of amendment to the filing instrument setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. A certificate of amendment under this subsection (c)(5) is deemed to be authorized by the authorization of the original filing instrument to which it relates and may be filed by the corporation without further action by the board of directors or the stockholders.

§10A-2A-1.21. Certificate of existence or registration.

(a) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of existence for a corporation if the writings filed in the office of the Secretary of State show that the corporation has been incorporated under the laws of this state. A certificate of existence shall reflect only the information on file with the Secretary of State. A certificate of existence must state:

(1) the corporation's name;

(2) that the corporation was incorporated under the laws of this state, the date of incorporation, and the filing office in which the certificate of incorporation was filed;

(3) whether the corporation has delivered to the Secretary of State for filing a certificate of dissolution;

(4) whether the corporation has delivered to the Secretary of State for filing a certificate of reinstatement; and

(5) other facts of record in the office of the Secretary of State that are specified by the person requesting the certificate.

(b) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of registration for a foreign corporation if the writings filed in the office of the Secretary of State show that the Secretary of State has filed an application for registration for authority to transact business in this state and the registration has not been revoked, withdrawn, or terminated. A certificate of registration must state:

(1) the foreign corporation's name and any alternate name adopted for use in this state;

(2) that the foreign corporation is authorized to transact business in this state;

(3) that the Secretary of State has not revoked the foreign corporation's registration;

(4) that the foreign corporation has not filed with the Secretary of State a certificate of withdrawal or otherwise terminated its registration; and

(5) other facts of record in the office of the Secretary of State that are specified by the person requesting the certificate.

(c) Subject to any qualification stated in the certificate, a certificate of existence or certificate of registration issued by the Secretary of State is conclusive evidence that the corporation is in existence or the foreign corporation is authorized to transact business in this state.

Division C. DEFINITIONS.

§10A-2A-1.40. Chapter definitions.

Notwithstanding Section 10A-1-1.03, as used in this chapter, unless otherwise specified or unless the context otherwise requires, the following terms have the following meaning:

(1) "Authorized stock" means the stock of all classes and series a corporation or foreign corporation is authorized to issue.

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

(3) "Certificate of incorporation" means the certificate of incorporation described in Section 10A-2A-2.02, all amendments to the certificate of incorporation, and any other documents permitted or required to be delivered for filing by a corporation with the Secretary of State under this chapter or Chapter 1 that modify, amend, supplement, restate, or replace the certificate of incorporation. After an amendment of the certificate of incorporation or any other document filed under this chapter or Chapter 1 that restates the certificate of incorporation in its entirety, the certificate of incorporation shall not include any prior documents. When used with respect to a corporation incorporated and existing on December 31, 2019, under a predecessor law of this state, the term "certificate of incorporation" means articles of incorporation, charter, or similar incorporating document, and all amendments and restatements to the certificate of incorporation, charter, or similar incorporating document. When used with respect to a foreign corporation, a nonprofit corporation, or a foreign nonprofit corporation, the "certificate of incorporation" of such an entity means the document of such entity that is equivalent to the certificate of incorporation of a corporation. The term "certificate of incorporation" as used in this chapter is synonymous to the term "certificate of formation" used in Chapter 1.

(4) "Corporation," except in the phrase "foreign corporation," means an entity incorporated or existing under this chapter.

(5) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with Section 10A-2A-1.41, by electronic transmission.

(6) "Distribution" means a direct or indirect transfer of cash or other property (except a corporation's own stock) or incurrence of indebtedness by a corporation to or for the benefit of its stockholders in respect of any of its stock. A distribution may be in the form of a payment of a dividend; a purchase, redemption, or other acquisition of stock; a distribution of indebtedness; a distribution in liquidation; or otherwise.

(7) "Document" means a writing as defined in Chapter 1.

(8) "Effective date," when referring to a document accepted for filing by the Secretary of State, means the time and date determined in accordance with Article 4 of Chapter 1.

(9) "Eligible entity" means an unincorporated entity, foreign unincorporated entity, nonprofit corporation, or foreign nonprofit corporation.

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

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

(12) "Entity" includes corporation; foreign corporation; nonprofit corporation; foreign nonprofit corporation; estate; trust; unincorporated entity; foreign unincorporated entity; and state, United States, and foreign government.

(13) "Expenses" means reasonable expenses of any kind that are incurred in connection with a matter.

(14) "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.

(15) "Foreign corporation" means a corporation incorporated under a law other than the law of this state which would be a corporation if incorporated under the law of this state.

(16) "Foreign nonprofit corporation" means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under the law of this state.

(17) "Governing statute" means the statute governing the internal affairs of a corporation, foreign corporation, nonprofit corporation, foreign nonprofit corporation, unincorporated entity, or foreign unincorporated entity.

(18) "Governmental subdivision" includes authority, county, district, and municipality.

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

(20) "Interest" means either or both of the following rights under the governing statute governing an unincorporated entity:

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

(ii) 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.

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

(22) "Knowledge" is determined as follows:

(a) A person knows a fact when the person:

(1) has actual knowledge of it; or

(2) is deemed to know it under law other than this chapter.

(b) A person has notice of a fact when the person:

(1) knows of it;

(2) receives notification of it in accordance with Section 10A-2A-1.41;

(3) has reason to know the fact from all of the facts known to the person at the time in question; or

(4) is deemed to have notice of the fact under subsection (d).

(c) A person notifies another of a fact by taking steps reasonably required to inform the other person in ordinary course in accordance with Section 10A-2A-1.41, whether or not the other person knows the fact.

(d) A person is deemed to have notice of a corporation's:

(1) matters included in the certificate of incorporation upon filing;

(2) dissolution, 90 days after a certificate of dissolution under Section 10A-2A-14.03 becomes effective;

(3) conversion, merger, or interest exchange under Article 9 or Article 11, 90 days after a statement of conversion, or statement of merger or interest exchange becomes effective;

(4) conversion or merger under Article 8 of Chapter 1, 90 days after a statement of conversion or statement of merger becomes effective; and

(5) revocation of dissolution and reinstatement, 90 days after certificate of revocation of dissolution and reinstatement under Section 10A-2A-14.04 becomes effective.

(e) A stockholder's knowledge, notice, or receipt of a notification of a fact relating to the corporation is not knowledge, notice, or receipt of a notification of a fact by the corporation solely by reason of the stockholder's capacity as a stockholder.

(f) The date and time of the effectiveness of a notice delivered in accordance with Section 10A-2A-1.41, is determined by Section 10A-2A-1.41.

(23) "Means" denotes an exhaustive definition.

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

(25) "Merger" means a transaction pursuant to Section 10A-2A-11.02.

(26) "Organizational documents" means the public organic record and private organizational documents of a corporation, foreign corporation, or eligible entity.

(27) "Principal office" means the office (in or out of this state) so designated in the annual report where the principal executive offices of a corporation or foreign corporation are located.

(28) "Private organizational documents" means (i) the bylaws of a corporation, foreign corporation, nonprofit corporation, or foreign nonprofit corporation or (ii) the rules, regardless of whether in writing, that govern the internal affairs of an unincorporated entity or foreign unincorporated entity, are binding on all its interest holders, and are not part of its public organic record, if any. Where private organizational documents have been amended or restated, the term means the private organizational documents as last amended or restated.

(29) "Proceeding" includes any civil suit and criminal, administrative, and investigatory action.

(30) "Public organic record" means (i) the certificate of incorporation of a corporation, foreign corporation, nonprofit corporation, or foreign nonprofit corporation, or (ii) the document, if any, the filing of which is required to create an unincorporated entity or foreign unincorporated entity, or which creates the unincorporated entity or foreign unincorporated entity and is required to be filed. Where a public organic record has been amended or restated, the term means the public organic record as last amended or restated.

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

(32) "Record stockholder" means (i) the person in whose name shares of stock are registered in the records of the corporation or (ii) the person identified as the beneficial owner of stock in a beneficial ownership certificate pursuant to Section 10A-2A-7.23 on file with the corporation to the extent of the rights granted by such certificate.

(33) "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under Section 10A-2A-8.40(c) to maintain the minutes of the meetings of the board of directors and of the stockholders and for authenticating records of the corporation.

(34) "Stock exchange" means a transaction pursuant to Section 10A-2A-11.03.

(35) "Stockholder" means a record stockholder.

(36) "Stock" means the units into which the proprietary interests in a corporation or foreign corporation are divided.

(37) "Type of entity" means a generic form of entity: (i) recognized at common law; or (ii) formed under a governing statute, 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.

(38) "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: a corporation, foreign corporation, nonprofit corporation, foreign nonprofit corporation, a series of a limited liability company or of another type of entity, an estate, a trust, a state, United States, or foreign government. The term includes a general partnership, limited liability company, limited partnership, business trust, joint stock association, and unincorporated nonprofit association.

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

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

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

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

(43) "Voting trust beneficial owner" means an owner of a beneficial interest in stock of the corporation held in a voting trust established pursuant to Section 10A-2A-7.30(a).

§10A-2A-1.41. Notice and other communications.

(a) 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.

(b) 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 non-exclusionary distribution to the public (which may include a newspaper of general circulation in the area where published; radio, television, or other form of public broadcast communication; or other methods of distribution that the corporation has previously identified to its stockholders).

(c) A notice or other communication to a 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 under Chapter 1.

(d) A notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection (j).

(e) Any consent under subsection (d) may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any consent is deemed revoked if (i) the corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with that consent, and (ii) 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; provided, however, the inadvertent failure to treat that inability as a revocation shall not invalidate any meeting or other action.

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

(1) 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

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

(g) Receipt of an electronic acknowledgement from an information processing system described in subsection (f)(1) establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

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

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

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

(i) a stockholder's address shown on the corporation's record of stockholders maintained by the corporation under Section 10A-2A-16.01(d);

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

(iii) the corporation's principal office;

(2) if mailed postage prepaid and correctly addressed to a stockholder, upon deposit in the United States mail;

(3) if mailed by United States mail postage prepaid and correctly addressed to a recipient other than a stockholder, 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) five days after it is deposited in the United States mail;

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

(5) if oral, when communicated.

(j) 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 (i) the electronic transmission is otherwise retrievable in perceivable form, and (ii) the sender and the recipient have consented in writing to the use of such form of electronic transmission.

(k) If this chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If the certificate 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 certificate of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

(l) In the event that any provisions of this chapter are deemed 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 shall control to the maximum extent permitted by Section 102(a)(2) of that federal act.

§10A-2A-1.42. Number of stockholders.

(a) For purposes of this chapter, the following identified as a stockholder in a corporation's current record of stockholders constitutes one stockholder:

(1) three or fewer co-owners;

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

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

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

§10A-2A-1.43. Qualified director.

(a) A "qualified director" is a director who, at the time action is to be taken under:

(1) Section 10A-2A-2.02(b)(6), 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;

(2) Section 10A-2A-7.44, 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;

(3) Section 10A-2A-8.53 or Section 10A-2A-8.55, (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 Section 10A-2A-8.60, which transaction or disclaimer is challenged, and (iii) does not have a material relationship with a director described in either clause (i) or clause (ii) of this subsection (a)(3); or

(4) Section 10A-2A-8.60, is not a director (i) as to whom the contract or transaction is a director's conflicting interest transaction, (ii) who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction, (iii) pursues or takes advantage of the business opportunity, directly, or indirectly through or on behalf of another person, or (iv) 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.

(b) For purposes of this section:

(1) "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; and

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

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

(1) nomination or election of the director to the current board of directors 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;

(2) 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

(3) with respect to action to be taken under Section 10A-2A-7.44, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

§10A-2A-1.44. Householding.

(a) A corporation has delivered written notice or any other report or statement under this chapter, the certificate of incorporation, or the bylaws to all stockholders who share a common address if:

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

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

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

(b) Any such consent described in subsection (a)(2) or (a)(3) shall be revocable by any stockholders 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 stockholder no later than 30 days after delivery of the written notice of revocation.

(c) Any stockholder 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 stockholders who share a common address as permitted by subsection (a), shall be deemed to have consented to receiving such single copy at the common address; provided that the notice of intention explains that consent may be revoked and the method for revoking.

Division D. RATIFICATION OF DEFECTIVE CORPORATE ACTIONS.

§10A-2A-1.45. Definitions.

In this article:

(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 stockholders.

(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 (i) any corporate action purportedly taken that is, and at the time such 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 (ii) 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 certificate of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable.

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

(i) stock of a class or series in excess of the number of shares of stock of a class or series the corporation has the power to issue under Section 10A-2A-6.01 at the time of such issuance; or

(ii) stock of any class or series that is not then authorized for issuance by the certificate of incorporation.

(6) "Putative stock" means the stock of any class or series (including stock issued upon exercise of rights, options, warrants, or other securities convertible into stock of the corporation, or interests with respect to such stock) that was created or issued as a result of a defective corporate action, that (i) but for any failure of authorization would constitute valid stock, or (ii) cannot be determined by the board of directors to be valid stock.

(7) "Valid stock" means the stock of any class or series that has been duly authorized and validly issued in accordance with this chapter, including as a result of ratification or validation under this article.

(8) "Validation effective time" with respect to any defective corporate action ratified under this article means the later of:

(i) the time at which the ratification of the defective corporate action is approved by the stockholders, or if approval of stockholders is not required, the time at which the notice required by Section 10A-2A-1.49 becomes effective in accordance with Section 10A-2A-1.41; and

(ii) the time at which any certificate of validation filed in accordance with Section 10A-2A-1.51 becomes effective.

The validation effective time shall not be affected by the filing or pendency of a judicial proceeding under Section 10A-2A-1.52 or otherwise, unless otherwise ordered by the court.

§10A-2A-1.46. Defective corporate actions.

(a) A defective corporate action shall not be void or voidable if ratified in accordance with Section 10A-2A-1.47 or validated in accordance with Section 10A-2A-1.52.

(b) Ratification under Section 10A-2A-1.47 or validation under Section 10A-2A-1.52 shall not be deemed to be the exclusive means of ratifying or validating any defective corporate action, and the absence or failure of ratification in accordance with this article shall not, of itself, affect the validity or effectiveness of any corporate action properly ratified under common law or otherwise, nor shall it create a presumption that any such corporate action is or was a defective corporate action or void or voidable.

(c) In the case of an overissue, putative stock shall be valid stock effective as of the date originally issued or purportedly issued upon:

(1) the effectiveness under this article and under Article 10 of an amendment to the certificate of incorporation authorizing, designating, or creating such stock; or

(2) the effectiveness of any other corporate action under this article ratifying the authorization, designation, or creation of such stock.

§10A-2A-1.47. Ratification of defective corporate actions.

(a) To ratify a defective corporate action under this section (other than the ratification of an election of the initial board of directors under subsection (b)), the board of directors shall take action ratifying the action in accordance with Section 10A-2A-1.48, stating:

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

(2) the date of the defective corporate action;

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

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

(b) 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 Section 10A-2A-2.04(a)(2), a majority of the persons who, at the time of the ratification, are exercising the powers of directors may take an action stating:

(1) 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;

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

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

(c) If any provision of this chapter, the certificate of incorporation or bylaws, any corporate resolution, or any plan or agreement to which the corporation is a party in effect at the time action under subsection (a) is taken requires stockholder approval or would have required stockholder 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 (a) shall be submitted to the stockholders for approval in accordance with Section 10A-2A-1.48.

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

§10A-2A-1.48. Action on ratification.

(a) The quorum and voting requirements applicable to a ratifying action by the board of directors under Section 10A-2A-1.47(a) shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time such ratifying action is taken.

(b) If the ratification of the defective corporate action requires approval by the stockholders under Section 10A-2A-1.47(c), and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative stock, 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 shall not be required to be given to holders of valid or putative stock 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 (i) either a copy of the action taken by the board of directors in accordance with Section 10A-2A-1.47(a) or the information required by Section 10A-2A-1.47(a)(1) through (a)(4), and (ii) a statement that any claim that the ratification of such defective corporate action and any putative stock issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.

(c) Except as provided in subsection (d) with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the stockholders required by Section 10A-2A-1.47(c) shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of such stockholder approval.

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

(e) Putative stock on the record date for determining the stockholders entitled to vote on any matter submitted to stockholders under Section 10A-2A-1.47(c) (and without giving effect to any ratification of putative stock that becomes effective as a result of such vote) shall neither be entitled to vote nor counted for quorum purposes in any vote to approve the ratification of any defective corporate action.

(f) If the approval under this section of putative stock would result in an overissue, in addition to the approval required by Section 10A-2A-1.47, approval of an amendment to the certificate of incorporation under Article 10 to increase the number of shares of stock of an authorized class or series or to authorize the creation of a class or series of stock so there would be no overissue shall also be required.

§10A-2A-1.49. Notice requirements.

(a) Unless stockholder approval is required under Section 10A-2A-1.47(c), prompt notice of an action taken under Section 10A-2A-1.47 shall be given to each holder of valid and putative stock, regardless of whether entitled to vote, as of (i) the date of such action by the board of directors and (ii) the date of the defective corporate action ratified, provided that notice shall not be required to be given to holders of valid and putative stock whose identities or addresses for notice cannot be determined from the records of the corporation.

(b) The notice must contain (i) either a copy of the action taken by the board of directors in accordance with Section 10A-2A-1.47(a) or (b) or the information required by Section 10A-2A-1.47(a)(1) through (a)(4) or Section 10A-2A-1.47(b)(1) through (b)(3), as applicable, and (ii) a statement that any claim that the ratification of the defective corporate action and any putative stock issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.

(c) No notice under this section is required with respect to any action required to be submitted to stockholders for approval under Section 10A-2A-1.47(c) if notice is given in accordance with Section 10A-2A-1.48(b).

(d) A notice required by this section may be given in any manner permitted by Section 10A-2A-1.41 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 such notice with the United States Securities and Exchange Commission.

§10A-2A-1.50. 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 Section 10A-2A-1.52:

(a) Each defective corporate action ratified in accordance with Section 10A-2A-1.47 shall not be void or voidable as a result of the failure of authorization identified in the action taken under Section 10A-2A-1.47(a) or (b) and shall be deemed a valid corporate action effective as of the date of the defective corporate action;

(b) The issuance of each share of putative stock or fraction of a share of putative stock purportedly issued pursuant to a defective corporate action identified in the action taken under Section 10A-2A-1.47 shall not be void or voidable, and each such share of putative stock or fraction of a share of putative stock shall be deemed to be an identical share of stock or fraction of a valid share of stock as of the time it was purportedly issued; and

(c) Any corporate action taken subsequent to the defective corporate action ratified in accordance with this Division D of Article 1 in reliance on such defective corporate action having been validly effected and any subsequent defective corporate action resulting directly or indirectly from such original defective corporate action shall be valid as of the time taken.

§10A-2A-1.51. Filings.

(a) If the defective corporate action ratified under this Division D of Article 1 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 in respect of such defective corporate action and in lieu of a filing otherwise required by this chapter, the corporation shall file a certificate of validation in accordance with this section, and that certificate of validation shall serve to amend or substitute for any other filing with respect to such defective corporate action required by this chapter.

(b) The certificate of validation must set forth:

(1) the defective corporate action that is the subject of the certificate of validation (including, in the case of any defective corporate action involving the issuance of putative stock, the number and type of shares of putative stock issued and the date or dates upon which that putative stock was purported to have been issued);

(2) the date of the defective corporate action;

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

(4) a statement that the defective corporate action was ratified in accordance with Section 10A-2A-1.47, including the date on which the board of directors ratified that defective corporate action and the date, if any, on which the stockholders approved the ratification of that defective corporate action; and

(5) the information required by subsection (c).

(c) The certificate of validation must also contain the following information:

(1) if a filing was previously made in respect of the defective corporate action and no changes to that filing are required to give effect to the ratification of that defective corporate action in accordance with Section 10A-2A-1.47, the certificate of validation must set forth (i) the name, title, and filing date of the filing previously made and any certificate of correction to that filing and (ii) a statement that a copy of the filing previously made, together with any certificate of correction to that filing, is attached as an exhibit to the certificate of validation;

(2) if a filing was previously made in respect of the defective corporate action and that filing requires any change to give effect to the ratification of that defective corporate action in accordance with Section 10A-2A-1.47, the certificate of validation must set forth (i) the name, title, and filing date of the filing previously made and any certificate 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 that defective corporate action is attached as an exhibit to the certificate of validation, and (iii) the date and time that filing is deemed to have become effective; or

(3) if a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under Section 10A-2A-1.47 would have required a filing under any other section of this chapter, the certificate 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 that defective corporate action is attached as an exhibit to the certificate of validation, and (ii) the date and time that filing is deemed to have become effective.

§10A-2A-1.52. Judicial proceedings regarding validity of corporate actions.

(a) Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any stockholder, beneficial stockholder or unrestricted voting trust beneficial owner of the corporation, including any stockholder, beneficial stockholder or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under Section 10A-2A-1.47, or any other person claiming to be substantially and adversely affected by a ratification under Section 10A-2A-1.47, the circuit court of the county where a corporation's principal office, or, if none in this state, its registered office, is located, may:

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

(2) determine the validity and effectiveness of any ratification under Section 10A-2A-1.47;

(3) determine the validity of any putative stock; and

(4) modify or waive any of the procedures specified in Section 10A-2A-1.47 or Section 10A-2A-1.48 to ratify a defective corporate action.

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

(c) Service of process of the application under subsection (a) 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 notice of the action be provided to other persons specified by the court and permit such other persons to intervene in the action.

(d) 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 stock issued as a result of a defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days of the validation effective time.

ARTICLE 2. INCORPORATION.

§10A-2A-2.01. Incorporators; filing of certificate of incorporation.

Notwithstanding Section 10A-1-3.04, in order to incorporate a corporation, one or more incorporators must execute a certificate of incorporation and deliver it for filing to the Secretary of State.

§10A-2A-2.02. Certificate of incorporation.

Notwithstanding Section 10A-1-3.05:

(a) The certificate of incorporation must set forth:

(1) a corporate name for the corporation that satisfies the requirements of Article 5 of Chapter 1;

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

(3) the street and mailing addresses of the corporation's initial registered office, the county within this state in which the street and mailing address is located, and the name of the corporation's initial registered agent at that office as required by Article 5 of Chapter 1; and

(4) the name and address of each incorporator.

(b) The certificate of incorporation may set forth:

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

(2) 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 stockholders;

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

(v) subject to subsection (f), a provision imposing personal liability for the debts of the corporation on its stockholders to a specified extent and upon specified conditions; otherwise, the stockholders of a corporation shall not be personally liable for the payment of the corporation's debts, except as they may be liable by reason of their own conduct or acts.

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

(4) a provision eliminating or limiting the liability of a director to the corporation or its stockholders 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 stockholders; (iii) a violation of Section 10A-2A-8.32; or (iv) an intentional violation of criminal law;

(5) a provision permitting or making obligatory indemnification of a director for liability as defined in Section 10A-2A-8.50 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 stockholders, (iii) a violation of Section 10A-2A-8.32, or (iv) an intentional violation of criminal law; and

(6) 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 that 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 same procedures as are set forth in Section 10A-2A-8.60, and (ii) may be limited by the authorizing action of the board of directors.

(c) The certificate of incorporation need not set forth any of the corporate powers enumerated in Sections 10A-1-2.11, 10A-1-2.12, and 10A-1-2.13.

(d) Provisions of the certificate of incorporation may be made dependent upon facts objectively ascertainable outside the certificate of incorporation in accordance with Section 10A-2A-1.20(c).

(e) As used in this section, "related person" has the meaning specified in Section 10A-2A-8.60.

(f) The certificate of incorporation may not contain any provision that would impose liability on a stockholder for the attorney's fees or expenses of the corporation or any other party in connection with an internal corporate claim, as defined in Section 10A-2A-2.07(d).

§10A-2A-2.03. 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.

§10A-2A-2.04. Organization of corporation.

(a) After incorporation:

(1) if initial directors are named in the certificate 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

(2) if initial directors are not named in the certificate 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.

(b) 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.

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

§10A-2A-2.05. Bylaws.

(a) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

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

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

(1) 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 any procedures or conditions as are provided in the bylaws, one or more individuals nominated by a stockholder in addition to individuals nominated by the board of directors; and

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

(d) Notwithstanding Section 10A-2A-10.20(b)(2), the stockholders in amending, repealing, or adopting a provision described in subsection (c) 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 a provision to provide for a reasonable, practical, and orderly process.

§10A-2A-2.06. Emergency bylaws.

(a) Unless the certificate of incorporation provides otherwise, the board of directors may adopt bylaws to be effective only in an emergency defined in subsection (d). The emergency bylaws, which are subject to amendment or repeal by the stockholders, may make all provisions necessary for managing the corporation during the emergency, including:

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

(2) quorum requirements for the meeting; and

(3) designation of additional or substitute directors.

(b) 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.

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

(1) binds the corporation; and

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

(d) 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.

§10A-2A-2.07. Forum selection provisions.

(a) The certificate of incorporation or the bylaws may require that any or all internal corporate claims shall 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.

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

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

(d) "Internal corporate claim" means, for the purposes of this section, (i) any claim that is based upon a violation of a duty under the laws of this state by a current or former director, officer, or stockholder in their capacities as such, (ii) any derivative action or proceeding brought on behalf of the corporation, (iii) any action asserting a claim arising pursuant to any provision of this chapter or the certificate of incorporation or bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine that is not included in (i) through (iii) above.

ARTICLE 3. PURPOSES AND POWERS.

§10A-2A-3.01. Purposes.

(a) 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 certificate of incorporation.

(b) 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.

§10A-2A-3.02. General powers.

Unless its certificate of incorporation provides 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 all entity powers provided in Section 10A-1-2.11, Section 10A-1-2.12, and Section 10A-1-2.13.

§10A-2A-3.03. Emergency powers.

(a) In anticipation of or during an emergency defined in subsection (d), the board of directors of a corporation may:

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

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

(b) During an emergency defined in subsection (d), unless emergency bylaws provide otherwise:

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

(2) one or more officers of the corporation present at a meeting of the board of directors may be deemed 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.

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

(1) binds the corporation; and

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

(d) 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.

§10A-2A-3.04. Lack of power to act.

(a) Except as provided in subsection (b), the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

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

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

(2) 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

(3) in a proceeding by the Attorney General under Section 10A-2A-14.10.

(c) In a stockholder's proceeding under subsection (b)(1) 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.

ARTICLE 4. RESERVED.

ARTICLE 5. RESERVED.

ARTICLE 6. STOCK AND DISTRIBUTIONS.

Division A. AUTHORIZED STOCK.

§10A-2A-6.01. Authorized stock.

(a) The certificate of incorporation must set forth any classes of stock and series of stock within a class, and the number of shares of stock of each class and series, that the corporation is authorized to issue. If more than one class or series of stock is authorized, the certificate of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of stock 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 stock of a class or series must have terms, including preferences, rights, and limitations, that are identical with those of other shares of stock of the same class or series.

(b) The certificate of incorporation must authorize:

(1) one or more classes or series of stock that together have full voting rights, and

(2) one or more classes or series of stock (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 upon dissolution.

(c) The certificate of incorporation may authorize one or more classes or series of stock that:

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

(2) are redeemable or convertible as specified in the certificate of incorporation:

(i) at the option of the corporation, the stockholder, or another person or upon 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;

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

(4) have preference over any other class or series of stock with respect to distributions, including distributions upon the dissolution of the corporation.

(d) Terms of stock may be made dependent upon facts objectively ascertainable outside the certificate of incorporation in accordance with Section 10A-2A-1.20(c).

(e) Any of the terms of stock may vary among holders of the same class or series so long as those variations are expressly set forth in the certificate of incorporation.

(f) The description of the preferences, rights, and limitations of classes or series of stock in subsection (c) is not exhaustive.

(g) The certificate of incorporation may authorize the board of directors, without stockholder approval, to adopt resolutions, prepare and deliver certificates and certificates of designation to the Secretary of State, and take any other actions described in Section 10A-2A-6.02.

§10A-2A-6.02. Terms of class or series determined by board of directors.

(a) When any corporation desires to issue any shares of stock of any class or of any series of any class of which the powers, designations, preferences and relative, participating, optional or other rights, if any, or the qualifications, limitations or restrictions thereof, if any, shall not have been set forth in the certificate of incorporation or in any amendment thereto but shall be provided for in a resolution or resolutions adopted by the board of directors pursuant to authority expressly vested in it by the certificate of incorporation or any amendment thereto, a certificate of designations setting forth a copy of the board resolution or resolutions and the number of shares of stock of the class or series as to which the resolution or resolutions apply shall be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1. If the certificate of incorporation vests authority in the board of directors to determine the powers, designations, preferences and relative, participating, optional or other rights, if any, or the qualifications, limitations or restrictions thereof, if any, of any class or series of stock, the board of directors is authorized to do so to the same extent permitted under Section 10A-2A-6.01.

(b) Unless otherwise provided in any resolution or resolutions described in subsection (a), the number of shares of stock of any class or series to which the resolution or resolutions apply may be increased (but not above the total number of authorized shares of the class) or decreased (but not below the number of shares thereof then outstanding) by a certificate likewise executed and delivered to the Secretary of State for filing setting forth a statement that a specified increase or decrease therein had been authorized and directed by a resolution or resolutions likewise adopted by the board of directors. In case the number of the authorized shares shall be decreased the number of shares so specified in the certificate shall resume the status which they had prior to the adoption of the first resolution or resolutions.

(c) When no shares of any authorized class or series are outstanding, either because none were issued or because no issued shares of any authorized class or series remain outstanding, a certificate setting forth a resolution or resolutions adopted by the board of directors that none of the authorized shares of that class or series are outstanding, and that none will be issued subject to the certificate of designations previously filed with respect to that class or series, may be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1, and when the certificate becomes effective, it shall have the effect of eliminating from the certificate of incorporation all matters set forth in the certificate of designations with respect to that class or series of stock.

(d) Unless otherwise provided in the certificate of incorporation, if no shares of stock have been issued of a class or series of stock established by a resolution of the board of directors, the voting powers, designations, preferences and relative, participating, optional or other rights, if any, or the qualifications, limitations or restrictions thereof, may be amended by a resolution or resolutions adopted by the board of directors. A certificate which: (1) states that no shares of the class or series have been issued; (2) sets forth a copy of the resolution or resolutions; and (3) if the designation of the class or series is being changed, indicates the original designation and the new designation, shall be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1.

(e) When any certificate filed under this section becomes effective, it shall have the effect of amending the certificate of incorporation; except that neither the filing of that certificate nor the filing of a restated certificate of incorporation pursuant to Section 10A-2A-10.07 shall prohibit the board of directors from subsequently adopting resolutions as authorized by this section.

§10A-2A-6.03. Issued and outstanding stock.

(a) A corporation may issue the number of shares of stock of each class or series authorized by the certificate of incorporation. Stock that is issued is outstanding stock until it is reacquired, redeemed, converted, or cancelled.

(b) The reacquisition, redemption, or conversion of outstanding stock is subject to the limitations of subsection (c) and to Section 10A-2A-6.40.

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

§10A-2A-6.04. Fractional stock.

(a) A corporation may issue fractions of a share of stock or in lieu of doing so may:

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

(2) issue scrip in registered or bearer form entitling the holder to receive a full share of stock upon surrendering enough scrip to equal a full share of stock; or

(3) arrange for disposition of fractional stock by the holders of that stock.

(b) Each certificate representing scrip must be conspicuously labeled "scrip" and must contain the information required by Section 10A-1-3.42(c).

(c) The holder of a fractional share of stock is entitled to exercise the rights of a stockholder, 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.

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

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

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

Division B. ISSUANCE OF STOCK.

§10A-2A-6.20. Subscription for stock before incorporation.

(a) A subscription for stock entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

(b) The board of directors may determine the payment terms of subscriptions for stock 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 stock of the same class or series, unless the subscription agreement specifies otherwise.

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

(d) 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 stock if the debt remains unpaid for more than 20 days after the corporation delivers a written demand for payment to the subscriber.

§10A-2A-6.21. Issuance of stock.

(a) The powers granted in this section to the board of directors may be reserved to the stockholders by the certificate of incorporation.

(b) The board of directors may authorize stock to be issued for consideration consisting of a contribution.

(c) Before the corporation issues stock, the board of directors shall determine that the consideration received or to be received for stock to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of stock relates to whether the stock is validly issued, fully paid, and nonassessable.

(d) When the corporation receives the consideration for which the board of directors authorized the issuance of stock, the stock issued therefor is fully paid and nonassessable.

(e) The corporation may place in escrow stock issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the stock, and may credit distributions in respect of the stock against its 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 stock escrowed or restricted and the distributions credited may be cancelled in whole or part.

§10A-2A-6.22. Liability of stockholders.

(a) A purchaser from a corporation of the corporation's own stock is not liable to the corporation or its creditors with respect to the stock except to pay the consideration for which the stock was authorized to be issued or specified in the subscription agreement.

(b) A stockholder is not personally liable for any liabilities of the corporation (including liabilities arising from acts of the corporation) except to the extent provided in a provision of the certificate of incorporation permitted by Section 10A-2A-2.02.

§10A-2A-6.23. Stock dividends.

(a) Unless the certificate of incorporation provides otherwise, stock may be issued pro rata and without consideration to the corporation's stockholders or to the stockholders of one or more classes or series of stock. An issuance of stock under this subsection is a stock dividend.

(b) Stock of one class or series may not be issued as a stock dividend in respect of stock of another class or series unless (i) the certificate of incorporation so authorizes, (ii) a majority of the votes entitled to be cast by the class or series to be issued approve the issuance, or (iii) there is no outstanding stock of the class or series to be issued.

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

§10A-2A-6.24. Stock rights, options, warrants, and awards.

(a) A corporation may issue rights, options, or warrants for the purchase of stock or other securities of the corporation. The board of directors shall determine (i) the terms and conditions upon which the rights, options, or warrants are issued and (ii) the terms, including the consideration for which the stock or other securities are to be issued. The authorization by the board of directors for the corporation to issue rights, options, or warrants constitutes authorization of the issuance of the stock or other securities for which the rights, options, or warrants are exercisable.

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

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

(2) invalidate or void rights, options, or warrants held by that person or persons or any of that person's transferee or transferees.

(c) The board of directors may authorize one or more officers to (i) designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of stock and (ii) determine, within an amount and subject to any other limitations established by the board of directors and, if applicable, the stockholders, the number of the 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 that authority to designate himself or herself or any other persons as the board of directors may specify as a recipient of rights, options, warrants, or other equity compensation awards.

§10A-2A-6.25. Form and content of certificates.

(a) Stock may, but need not, be represented by certificates. Unless this chapter or another statute expressly provides otherwise, the rights and obligations of stockholders are identical regardless of whether their stock is represented by certificates.

(b) Each stock certificate must be signed by two officers designated in the certificate of incorporation or bylaws.

(c) Each certificate representing stock shall comply with Sections 10A-1-3.42, 10A-1-3.43(b), and 10A-1-3.44.

(d) No certificate representing stock shall be issued in bearer form.

§10A-2A-6.26. Uncertificated interests.

(a) Unless the certificate 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 stock of any or all of its classes or series without certificates. The authorization does not affect shares of stock already represented by certificates until they are surrendered to the corporation.

(b) Within a reasonable time after the issuance or transfer of shares of stock without certificates, the corporation shall comply with the notice requirements of Section 10A-1-3.45.

§10A-2A-6.27. Restriction on transfer of stock.

(a) The certificate of incorporation, the bylaws, an agreement among stockholders, or an agreement between stockholders and the corporation may impose restrictions on the transfer or registration of transfer of stock of the corporation. A restriction does not affect stock issued before the restriction was adopted unless the holders of the stock are parties to the restriction agreement or voted in favor of the restriction.

(b) A restriction on the transfer or registration of transfer of stock is valid and enforceable against the corporation, the holder, or a transferee of the holder if the restriction is authorized by this section and as provided in Section 10A-1-3.42 its existence is noted conspicuously on the front or back of the certificate or is contained in the information required by Section 10A-1-3.45. Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction.

(c) A restriction on the transfer or registration of transfer of stock is authorized:

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

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

(3) for any other reasonable purpose.

(d) A restriction on the transfer or registration of transfer of stock may include a restriction that:

(1) obligates the stockholder first to offer the corporation or other persons (separately, consecutively, or simultaneously) an opportunity to acquire the restricted stock;

(2) obligates the corporation or other persons (separately, consecutively, or simultaneously) to acquire the restricted stock;

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

(4) prohibits the transfer or registration of the restricted stock to designated persons or classes of persons, if the prohibition is not manifestly unreasonable; or

(5) requires the corporation to refuse to transfer the stock.

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

§10A-2-6.28. Expense of issue.

A corporation may pay the expenses of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

Division C. SUBSEQUENT ACQUISITION OF STOCK BY STOCKHOLDERS AND CORPORATION.

§10A-2A-6.30. Stockholders' preemptive rights.

(a) The stockholders of a corporation do not have a preemptive right to acquire the corporation's unissued stock except to the extent the certificate of incorporation so provides.

(b) A statement included in the certificate 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 certificate of incorporation expressly provides otherwise:

(1) The stockholders 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 stock upon the decision of the board of directors to issue them.

(2) A preemptive right may be waived by a stockholder. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.

(3) There is no preemptive right with respect to:

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

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

(iii) stock authorized in the certificate of incorporation that is issued within six months from the effective date of incorporation; or

(iv) stock sold otherwise than for cash.

(4) Holders of stock of any class or series without voting power but with preferential rights to distributions have no preemptive rights with respect to stock of any class or series.

(5) Holders of stock of any class or series with voting power but without preferential rights to distributions have no preemptive rights with respect to stock of any class or series with preferential rights to distributions unless the stock with preferential rights is convertible into or carry a right to subscribe for or acquire the stock without preferential rights.

(6) Stock subject to preemptive rights that is not acquired by stockholders may be issued to any person for a period of one year after being offered to stockholders 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 one year is subject to the stockholders' preemptive rights.

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

§10A-2A-6.31. Corporation's acquisition of its own stock.

(a) A corporation may acquire its own stock, and, unless otherwise provided in the certificate of incorporation, stock so acquired constitutes authorized but unissued stock.

(b) If the certificate of incorporation prohibits the reissue of the acquired stock, the number of authorized shares of stock is reduced by the number of shares of stock acquired.

Division D. DISTRIBUTIONS.

§10A-2A-6.40. Distributions to stockholders.

(a) The board of directors may authorize and the corporation may make distributions to its stockholders subject to restriction by the certificate of incorporation and the limitation in subsection (c).

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

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

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

(2) the corporation's total assets would be less than the sum of its total liabilities plus (unless the certificate of incorporation permits 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 upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution.

(d) The board of directors may base a determination that a distribution is not prohibited under subsection (c) 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.

(e) Except as provided in subsection (g), the effect of a distribution under subsection (c) is measured:

(1) in the case of distribution by purchase, redemption, or other acquisition of the corporation's stock, as of the earlier of (i) the date cash or other property is transferred or debt to a stockholder is incurred by the corporation or (ii) the date the stockholder ceases to be a stockholder with respect to the acquired stock;

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

(3) 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.

(f) A corporation's indebtedness to a stockholder 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.

(g) Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (c) if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to stockholders 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.

(h) This section shall not apply to distributions in liquidation under Article 14.

ARTICLE 7. STOCKHOLDERS.

Division A. MEETINGS.

§10A-2A-7.01. Annual meetings.

(a) Unless directors are elected by written consent in lieu of an annual meeting as permitted by Section 10A-2A-7.04, a corporation shall hold a meeting of stockholders annually at a time stated in or fixed in accordance with the certificate of incorporation or bylaws at which directors shall be elected.

(b) Unless the board of directors determines to hold the meeting solely by means of remote communication in accordance with Section 10A-2A-7.09(c), annual meetings may be held (i) in or out of this state at the place stated in or fixed in accordance with the certificate of incorporation or bylaws or (ii) if no place is stated in or fixed in accordance with the certificate of incorporation or bylaws, at the corporation's principal office.

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

§10A-2A-7.02. Special meetings.

(a) Special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.

(b) In the event that the certificate of incorporation or bylaws allow stockholders to demand a special meeting of the stockholders, then if not otherwise fixed under Section 10A-2A-7.03 or Section 10A-2A-7.07, the record date for determining stockholders entitled to demand a special meeting shall be the first date on which a signed stockholder demand is delivered to the corporation. No written demand for a special meeting shall be effective unless, within 60 days of the earliest date on which the demand delivered to the corporation as allowed by the certificate of incorporation or bylaws was signed, written demands signed by stockholders holding at least the percentage of votes specified in or fixed in accordance with the certificate of incorporation or bylaws have beendeliveredto the corporation.

(c) Unless the board of directors determines to hold the meeting solely by means of remote participation in accordance with Section 10A-2A-7.09(c), special meetings of stockholders may be held (i) in or out of this state at the place stated in or fixed in accordance with the certificate of incorporation or bylaws or (ii) if no place is stated in or fixed in accordance with the certificate of incorporation or bylaws, at the corporation's principal office.

(d) Only business within the purpose or purposes described in the meeting notice required by Section 10A-2A-7.05(c) may be conducted at a special meeting of stockholders.

§10A-2A-7.03. Court-ordered meetings.

(a) The circuit court of the county where a corporation's principal office, or, if none in this state, its registered office, is located may summarily order a meeting to be held:

(1) on application of any stockholder of the corporation entitled to participate in an annual meeting 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 12 months after the end of the corporation's fiscal year or 15 months after its last annual meeting; or

(2) on application of one or more stockholders who signed a demand for a special meeting valid under Section 10A-2A-7.02, if:

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

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

(b) The court may fix the time and place of the meeting, determine the stock entitled to participate in the meeting, specify a record date or dates for determining stockholders 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 stock 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.

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

§10A-2A-7.04. Action without meeting.

(a) Unless otherwise provided in the certificate of incorporation, any action required or permitted by this chapter to be taken at any meeting of the stockholders may be taken without a meeting, and without prior notice, if one or more consents in writing setting forth the action so taken are signed by the holders of outstanding stock 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 of stock entitled to vote on the action were present and voted; provided, however, that if a corporation's certificate of incorporation authorizes stockholders to cumulate their votes when electing directors pursuant to Section 10A-2A-7.28, directors may not be elected by less than unanimous written consent. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders approving the action and delivered to the corporation for filing by the corporation with the minutes or corporate records.

(b) If not otherwise fixed under Section 10A-2A-7.07 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 stockholders entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the corporation. If not otherwise fixed under Section 10A-2A-7.07 and if prior action by the board of directors is required respecting the action to be taken without a meeting, the record date shall be the close of business on the day the resolution of the board of directors taking the prior action is adopted. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest date on which a consent is delivered to the corporation as required by this section, written consents signed by sufficient stockholders 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.

(c) A consent signed pursuant to the provisions of this section has the effect of a vote taken at a meeting and may be described as such in any document. Unless the certificate of incorporation, 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 shall be effective when written consents signed by sufficient stockholders to take the action have been delivered to the corporation.

(d) If this chapter requires that notice of a proposed action be given to nonvoting stockholders and the action is to be taken by written consent of the voting stockholders, the corporation shall give its nonvoting stockholders written notice of the action not more than 10 days after (i) written consents sufficient to take the action have been delivered to the corporation, or (ii) any later date that tabulation of consents is completed pursuant to an authorization under subsection (d). 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 stockholders in a notice of a meeting at which the proposed action would have been submitted to the stockholders for action.

(e) If action is taken by less than unanimous written consent of the voting stockholders, the corporation shall give its nonconsenting voting stockholders written notice of the action not more than 10 days after (i) written consents sufficient to take the action have been delivered to the corporation, or (ii) any later date that tabulation of consents is completed pursuant to an authorization under subsection (c). 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 stockholders in a notice of a meeting at which the action would have been submitted to the stockholders for action.

(f) The notice requirements in subsections (d) and (e) shall not delay the effectiveness of actions taken by written consent, and a failure to comply with those notice requirements shall not invalidate actions taken by written consent, provided that this subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a stockholder adversely affected by a failure to give the notice within the required time period.

§10A-2A-7.05. Notice of meeting.

(a) A corporation shall notify stockholders of the place, if any, date, and time of each annual and special stockholders' meeting no fewer than 10 nor more than 60 days before the meeting date. If the board of directors has authorized participation by means of remote communication pursuant to Section 10A-2A-7.09 for holders of any class or series of stock, the notice to the holders of that class or series of stock must describe the means of remote communication to be used. The notice must include the record date for determining the stockholders entitled to vote at the meeting, if that date is different from the record date for determining stockholders entitled to notice of the meeting. Unless this chapter or the certificate of incorporation requires otherwise, the corporation is required to give notice only to stockholders entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting.

(b) Unless this chapter or the certificate of incorporation requires otherwise, the notice of an annual meeting of stockholders need not include a description of the purpose or purposes for which the meeting is called.

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

(d) If not otherwise fixed under Section 10A-2A-7.03 or Section 10A-2A-7.07, the record date for determining stockholders entitled to notice of and to vote at an annual or special stockholders' meeting is the day before the first notice is delivered to stockholders.

(e) Unless the certificate of incorporation or bylaws require otherwise, if an annual or special stockholders' meeting is adjourned to a different place, if any, date, or time, notice need not be given of the new place, if any, date, or time if the new place, if any, date, or time is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under Section 10A-2A-7.07, however, notice of the adjourned meeting shall be given under this section to stockholders entitled to vote at the adjourned meeting as of the record date fixed for notice of the adjourned meeting.

§10A-2A-7.06. Waiver of notice.

(a) A stockholder may waive any notice required by this chapter or the certificate 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 stockholder entitled to the notice, and be delivered to the corporation for filing by the corporation with the minutes or corporate records.

(b) A stockholder's attendance at a meeting:

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

(2) 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 stockholder objects to considering the matter when it is presented.

§10A-2A-7.07. Record date for meeting.

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

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

(c) A determination of stockholders entitled to notice of or to vote at a stockholders' 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.

(d) 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 continues in effect or it may fix a new record date or dates.

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

§10A-2A-7.08. Conduct of meeting.

Unless the certificate of incorporation or bylaws provide otherwise, a meeting of the stockholders shall be conducted as follows:

(a) At each meeting of stockholders, a chair shall preside. The chair shall be appointed by the board of directors.

(b) The board of directors shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

(c) The chair of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall be deemed to have closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies or votes nor any revocations or changes to ballots, proxies or votes may be accepted.

§10A-2A-7.09. Remote participation in stockholders' meetings; meetings held solely by remote participation.

(a) Stockholders of any class or series of stock may participate in any meeting of stockholders by means of remote communication to the extent the board of directors authorizes participation for that class or series. Participation as a stockholder by means of remote communication shall be subject to guidelines and procedures as the board of directors adopts, and shall be in conformity with subsection (b).

(b) Stockholders participating in a stockholders' meeting by means of remote communication shall be deemed present and may vote at that meeting if the corporation has implemented reasonable measures:

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

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

(c) Unless the certificate of incorporation or bylaws require the meeting of stockholders to be held at a place, the board of directors may determine that any meeting of stockholders shall not be held at any place and shall instead be held solely by means of remote communication, but only if the corporation implements the measures specified in subsection (b).

Division B. VOTING.

§10A-2A-7.20. Stockholders' list for meeting.

(a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its stockholders who are entitled to notice of a stockholders' meeting. If the board of directors fixes a different record date under Section 10A-2A-7.07(e) to determine the stockholders entitled to vote at the meeting, a corporation also shall prepare an alphabetical list of the names of all its stockholders 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 stock) and show the address of and number of shares of stock held by each stockholder. Nothing contained in this subsection shall require the corporation to include on that list the electronic mail address or other electronic contact information of a stockholder.

(b) The stockholders' list for notice shall be available for inspection by any stockholder, beginning two business days after notice of the meeting is given 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 such 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 such information is available only to stockholders of the corporation. A stockholders' list for voting shall be similarly available for inspection promptly after the record date for voting. A stockholder, or the stockholder's agent or attorney, is entitled on written demand to inspect and, subject to the requirements of Section 10A-2A-16.02(c), to copy a list, during regular business hours and at the stockholder's expense, during the period it is available for inspection.

(c) If the meeting is to be held at a place, the corporation shall make the list of stockholders entitled to vote available at the meeting, and any stockholder, or the stockholder'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 such list shall also be open to such inspection during the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

(d) If the corporation refuses to allow a stockholder, or the stockholder's agent or attorney, to inspect a stockholders' list before or at the meeting (or copy a list as permitted by subsection (b)), the circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located, on application of the stockholder, 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.

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

(f) The stock transfer records of the corporation shall be prima facie evidence as to who are the stockholders entitled to examine the stockholders' list or transfer records or to vote at any meeting of stockholders.

§10A-2A-7.21. Voting entitlement of stock.

(a) Except as provided in subsections (b) and (d) or unless the certificate of incorporation provides otherwise, each outstanding share of stock, regardless of class or series, is entitled to one vote on each matter voted on at a stockholders' meeting. Only stock is entitled to vote.

(b) Stock of a corporation is not entitled to vote if it is owned by or otherwise belongs to the corporation directly, or indirectly through an entity of which a majority of the voting power is held directly or indirectly by the corporation or which is otherwise controlled by the corporation.

(c) Stock held by the corporation in a fiduciary capacity for the benefit of any person is entitled to vote unless it is held for the benefit of, or otherwise belongs to, the corporation directly, or indirectly through an entity of which a majority of the voting power is held directly or indirectly by the corporation or which is otherwise controlled by the corporation.

(d) Redeemable stock is not entitled to vote after delivery of written notice of redemption is effective and a sum sufficient to redeem the stock 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 stock.

(e) 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 governing persons of another entity.

§10A-2A-7.22. Proxies.

(a) A stockholder may vote the stockholder's stock in person or by proxy.

(b) A stockholder, or the stockholder's agent or attorney-in-fact, may appoint a proxy to vote or otherwise act for the stockholder 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.

(c) 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 count 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 (d).

(d) 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:

(1) a pledgee;

(2) a person who purchased or agreed to purchase the stock;

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

(4) an employee of the corporation whose employment contract requires the appointment; or

(5) a party to a voting agreement created under Section 10A-2A-7.31.

(e) The death or incapacity of the stockholder 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.

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

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

(h) Subject to Section 10A-2A-7.24 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 stockholder making the appointment.

(i) Nothing in this section shall be construed as limiting, or extending, authority granted under a durable power of attorney under Section 26-1-2 or Chapter 1A of Title 26, and any successor statute or statutes thereto.

§10A-2A-7.23. Stock held by intermediaries and nominees.

(a) A corporation's board of directors may establish a procedure under which a person on whose behalf stock is registered in the name of an intermediary or nominee may elect to be treated by the corporation as the record stockholder by filing with the corporation a beneficial ownership certificate. The terms, conditions, and limitations of this treatment shall be specified in the procedure. To the extent that person is treated under those procedures as having rights or privileges that the record stockholder otherwise would have, the record stockholder shall not have those rights or privileges.

(b) The procedure must specify:

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

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

(3) the manner in which the procedure is selected which must include that the beneficial ownership certificate be signed or assented to by or on behalf of the record stockholder and the person on whose behalf the stock is held;

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

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

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

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

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

§10A-2A-7.24. Acceptance of votes and other instruments.

(a) If the name signed on a vote, ballot, consent, waiver, stockholder demand, or proxy appointment corresponds to the name of a stockholder, the corporation, if acting in good faith, is entitled to accept the vote, ballot, consent, waiver, stockholder demand, or proxy appointment and give it effect as the act of the stockholder.

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

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

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

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

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

(5) two or more persons are the stockholder as co-tenants or fiduciaries and 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.

(c) The corporation is entitled to reject a vote, ballot, consent, waiver, stockholder demand, or proxy appointment if the person authorized to accept or reject that 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 stockholder.

(d) Neither the corporation or any person authorized by it, nor an inspector of election appointed under Section 10A-2A-7.29, that accepts or rejects a vote, ballot, consent, waiver, stockholder demand, or proxy appointment in good faith and in accordance with the standards of this Section 10A-2A-7.24 or Section 10A-2A-7.22(b) is liable in damages to the stockholder for the consequences of the acceptance or rejection.

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

(f) If an inspector of election has been appointed under Section 10A-2A-7.29, the inspector of election also has the authority to request information and make determinations under subsections (a), (b), and (c). Any determination made by the inspector of election under those subsections is controlling.

§10A-2A-7.25. Quorum and voting requirements for voting groups.

(a) Stock entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares of stock exists with respect to that matter. Unless the certificate of incorporation provides otherwise, stock representing a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter. Whenever this chapter requires a particular quorum for a specified action, the certificate of incorporation may not provide for a lower quorum.

(b) Once a share of stock is represented for any purpose at a meeting, it is deemed 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.

(c) 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 certificate of incorporation requires a greater number of affirmative votes.

(d) An amendment of the certificate of incorporation adding, changing, or deleting a quorum or voting requirement for a voting group greater than specified in subsection (a) or subsection (c) is governed by Section 10A-2A-7.27.

(e) The election of directors is governed by Section 10A-2A-7.28.

(f) Whenever a provision of this chapter provides for voting of classes or series as separate voting groups, the rules provided in Section 10A-2A-10.04(c) for amendments of the certificate of incorporation apply to that provision.

§10A-2A-7.26. Action by single and multiple voting groups.

(a) If the certificate of incorporation or this chapter provides for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Section 10A-2A-7.25.

(b) If the certificate 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 voted upon by each of those voting groups counted separately as provided in Section 10A-2A-7.25. Action may be taken by different voting groups on a matter at different times.

§10A-2A-7.27. Modifying quorum or voting requirements.

An amendment to the certificate of incorporation that adds, changes, or deletes a quorum or voting requirement shall 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.

§10A-2A-7.28. Voting for directors; cumulative voting.

(a) Unless otherwise provided in the certificate of incorporation, directors are elected by a plurality of the votes cast by the stock entitled to vote in the election at a meeting at which a quorum is present.

(b) Stockholders do not have a right to cumulate their votes for directors unless the certificate of incorporation so provides.

(c) A statement included in the certificate of incorporation that "[all] [a designated voting group of] stockholders are entitled to cumulate their votes for directors" (or words of similar import) means that the stockholders 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 cast the product for a single candidate or distribute the product among two or more candidates.

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

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

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

§10A-2A-7.29. Inspectors of election.

(a) The corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability.

(b) The inspectors shall:

(1) Ascertain the number of shares of stock outstanding and the voting power of each;

(2) Determine the shares of stock represented at a meeting and the validity of proxies and ballots;

(3) Count all votes and ballots;

(4) Determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and

(5) Certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

(c) The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless a court of competent jurisdiction upon application by a stockholder shall determine otherwise.

(d) In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Section 10-2A-7.22, or any information provided pursuant to Section 10A-2A-7.09(b), ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to paragraph (b)(5) of this section shall specify the precise information considered by them including 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 accurate and reliable.

(e) Unless otherwise provided in the certificate of incorporation or bylaws, this section shall not apply to a corporation that does not have a class of voting stock that is:

(1) Listed on a national securities exchange;

(2) Authorized for quotation on an interdealer quotation system of a registered national securities association; or

(3) Held of record by more than 2,000 stockholders.

Division C. VOTING TRUSTS AND AGREEMENTS.

§10A-2A-7.30. Voting trusts.

(a) One or more stockholders 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 stock 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 stock each transferred to the trust, and deliver copies of the list and agreement to the corporation at its principal office.

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

(c) Limits, if any, on the duration of a voting trust shall be as set forth in the voting trust. A voting trust that became effective when this chapter provided a 10-year limit on its duration remains governed by the provisions of this section concerning duration then in effect, unless the voting trust is amended to provide otherwise by unanimous agreement of the parties to the voting trust.

§10A-2A-7.31. Voting agreements.

(a) Two or more stockholders may provide for the manner in which they will vote their stock by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of Section 10A-2A-7.30.

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

§10A-2A-7.32. Stockholder agreements.

(a) An agreement among the stockholders of a corporation that complies with this section is effective among the stockholders and the corporation even though it is inconsistent with one or more other provisions of this chapter in that it:

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

(2) governs the authorization or making of distributions, regardless of whether they are in proportion to ownership of stock, subject to the limitations in Section 10A-2A-6.40;

(3) establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal;

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

(5) 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 stockholder, director, officer or employee of the corporation or among any of them;

(6) transfers to one or more stockholders 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 stockholders;

(7) requires dissolution of the corporation at the request of one or more of the stockholders or upon the occurrence of a specified event or contingency; or

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

(b) An agreement authorized by this section shall be:

(1) as set forth (i) in the certificate of incorporation or bylaws and approved by all persons who are stockholders at the time of the agreement, or (ii) in a written agreement that is signed by all persons who are stockholders at the time of the agreement and is made known to the corporation; and

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

(c) The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding stock or in the information required by Section 10A-1-3.45. If at the time of the agreement the corporation has stock 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 as required by this subsection shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of stock who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or if the stock is not represented by a certificate, the information required by Section 10A-1-3.45 is delivered to the purchaser at or before the time of purchase of the stock. An action to enforce the right of rescission authorized by this subsection shall be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of purchase of the stock.

(d) 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 certificate of incorporation or bylaws, adopt an amendment to the certificate of incorporation or bylaws, without stockholder action, to delete the agreement and any references to it.

(e) An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon 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. An agreement authorized by this section that eliminates the board of directors shall impose on the person or persons in whom the discretion or powers of the directors are vested the liability for acts or omissions as are imposed by law on directors.

(f) The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any stockholder 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.

(g) Incorporators or subscribers for stock may act as stockholders with respect to an agreement authorized by this section if no stock has been issued when the agreement is made.

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

Division D. DERIVATIVE PROCEEDINGS.

§10A-2A-7.40. Division definitions.

In this division:

(1) "Derivative proceeding" means a civil suit in the right of a corporation or, to the extent provided in Section 10A-2A-7.48, in the right of a foreign corporation.

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

§10A-2A-7.41. Right of derivative action.

A stockholder may commence or maintain a derivative action in the right of a corporation to enforce a right of the corporation by complying with this division.

§10A-2A-7.42. Standing.

A stockholder may commence or maintain a derivative action in the right of the corporation only if the stockholder:

(1) fairly and adequately represents the interests of the corporation in enforcing the right of the corporation; and

(2) either:

(A) was a stockholder of the corporation at the time of the act or omission of which the stockholder complains; or

(B) whose status as a stockholder devolved upon the person by operation of law from a person who was a stockholder at the time of the act or omission of which the stockholder complains.

§10A-2A-7.43. Demand.

A stockholder may commence a derivative action in the right of the corporation, if:

(a) the stockholder first makes a written demand upon the corporation requesting that it bring an action to enforce the right and the corporation does not bring the action within a reasonable time; or

(b) a demand under subsection (a) would be futile.

§10A-2A-7.44. Pleading.

In a derivative action, the complaint must state with particularity:

(a) the date and content of plaintiff's demand and the corporation's response by the corporation to the demand; or

(b) why the demand should be excused as futile.

§10A-2A-7.45. Stay of proceedings.

For the purpose of allowing the corporation time to undertake an inquiry into the allegations made in the demand or complaint commenced pursuant to this division, the court may stay any derivative action for the period the court deems appropriate.

§10A-2A-7.46. Discontinuance or settlement.

A derivative action may not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to stockholders of the corporation in such manner as the court directs.

§10A-2A-7.47. Proceeds and expenses.

(a) Except as otherwise provided in subsection (b):

(1) any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the corporation and not to the derivative plaintiff; and

(2) if the derivative plaintiff receives any proceeds, the derivative plaintiff shall immediately remit them to the corporation.

(b) If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees, from the recovery of the corporation.

§10A-2A-7.48. Applicability to foreign corporations.

In any derivative action in the right of a foreign corporation, the right of a person to commence or maintain a derivative action in the right of a foreign corporation, and any matters raised in the action covered by Sections 10A-2A-7.42 through 10A-2A-7.47, shall be governed by the law of the jurisdiction under which the foreign corporation was formed; except that any matters raised in the action covered by Sections 10A-2A-7.45, 10A-2A-7.46, and 10A-2A-7.47 shall be governed by the law of this state.

ARTICLE 8. DIRECTORS AND OFFICERS.

Division A. BOARD OF DIRECTORS.

§10A-2A-8.01. Requirement for and functions of board of directors.

(a) Except as may be provided in an agreement authorized under Section 10A-2A-7.32, each corporation shall have a board of directors.

(b) Except as may be provided in an agreement authorized under Section 10A-2A-7.32, and subject to any limitation in the certificate of incorporation permitted by Section 10A-2A-2.02(b), all corporate powers shall be exercised by or under the authority of the board of directors, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of the board of directors.

§10A-2A-8.02. Qualifications of directors.

(a) The certificate of incorporation or bylaws may prescribe qualifications for directors or for nominees for directors. Qualifications must be reasonable as applied to the corporation and be lawful.

(b) A requirement that is based on a past, prospective, or current action, or expression of opinion, by a nominee for director or a director that could limit the ability of a nominee for director or a director to discharge his or her duties as a director is not a permissible qualification under this section. Notwithstanding the foregoing, 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.

(c) A director shall be a natural person of the age of at least 19 years but need not be a resident of this state or a stockholder unless the certificate of incorporation or bylaws so prescribe.

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

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

§10A-2A-8.03. Number and election of directors.

(a) A board of directors shall consist of one or more individuals, with the number specified in or fixed in accordance with the certificate of incorporation or bylaws.

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

(c) Except as set forth in Section 10A-2A-2.04, directors are elected at the first annual stockholders' meeting and at each annual stockholders' meeting thereafter unless elected by written consent in lieu of an annual meeting as permitted by Section 10A-2A-7.04 or unless their terms are staggered under Section 10A-2A-8.06.

§10A-2A-8.04. Election of directors by certain classes or series of stock.

If the certificate of incorporation or action by the board of directors pursuant to Section 10A-2A-6.02 authorizes dividing the stock into classes or series, the certificate 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 stock. A class or series (or multiple classes or series) of stock entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

§10A-2A-8.05. Terms of directors generally.

(a) The terms of the initial directors of a corporation expire at the first stockholders' meeting at which directors are elected.

(b) The terms of all other directors expire at the next, or if their terms are staggered in accordance with Section 10A-2A-8.06, at the applicable second or third, annual stockholders' meeting following their election, except to the extent (i) provided in Section 10A-2A-10.22 if a bylaw electing to be governed by that section is in effect, or (ii) a shorter term is specified in the certificate of incorporation in the event of a director nominee failing to receive a specified vote for election.

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

(d) Except as set forth in the next sentence of this subsection, the term of a director elected to fill a vacancy expires at the next stockholders' meeting at which directors are elected. The term of a director elected to fill a vacancy in a corporation, the directors of which have been divided into groups under Section 10A-2A-8.06, shall hold office until the next election of the group for which that group of directors has been chosen, and until their successors shall be elected and qualified.

(e) Except to the extent otherwise provided in the certificate of incorporation or under Section 10A-2A-10.22 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.

§10A-2A-8.06. Staggered terms for directors.

The certificate 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 stockholders' meeting after their election, the terms of the second group expire at the second annual stockholders' meeting after their election, and the terms of the third group, if any, expire at the third annual stockholders' meeting after their election. At each annual stockholders' meeting held thereafter, directors shall be elected for a term of two years or three years, as the case may be, to succeed those whose terms expire.

§10A-2A-8.07. Resignation of directors.

(a) A director may resign at any time by delivering a written notice of resignation to the board of directors or its chair, to the secretary, or to the corporation.

(b) A resignation is effective as provided in Section 10A-2A-1.41(i) unless the resignation provides for a delayed effectiveness, including effectiveness determined upon a future event or events. A resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.

§10A-2A-8.08. Removal of directors by stockholders.

(a) The stockholders may remove one or more directors with or without cause unless the certificate of incorporation provides that directors may be removed only for cause.

(b) If a director is elected by a voting group of stockholders, only the stockholders of that voting group may participate in the vote to remove that director.

(c) 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 certificate of incorporation or bylaws require a greater number; provided that 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 voted against removal and, if in the case of an action by written consent, the action is taken by less than unanimous consent.

(d) A director may be removed by the stockholders only at a meeting called for the purpose of removing the director and the meeting notice must state that removal of the director is a purpose of the meeting.

§10A-2A-8.09. Removal of directors by judicial proceeding.

(a) The circuit court of the county where the corporation's principal office, or if none in this state, its registered office, is located 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 (i) the director engaged in fraudulent conduct with respect to the corporation or its stockholders, grossly abused the position of director, or intentionally inflicted harm on the corporation; and (ii) considering the director's course of conduct and the inadequacy of other available remedies, removal or such other relief would be in the best interest of the corporation.

(b) A stockholder proceeding on behalf of the corporation under subsection (a) shall comply with all of the requirements of Division D of Article 7, except clause (2) of Section 10A-2A-7.42.

§10A-2A-8.10. Vacancy on board of directors.

(a) Unless the certificate of incorporation provides otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:

(1) the stockholders may fill the vacancy;

(2) the board of directors may fill the vacancy; or

(3) 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.

(b) If the vacant office was held by a director elected by a voting group of stockholders, only the holders of stock of that voting group are entitled to vote to fill the vacancy if it is filled by the stockholders, 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.

(c) A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date under Section 10A-2A-8.07(b) or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

§10A-2A-8.11. Compensation of directors.

Unless the certificate of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

Division B. MEETINGS AND ACTION OF THE BOARD OF DIRECTORS.

§10A-2A-8.20. Meetings.

(a) The board of directors may hold regular or special meetings in or out of this state.

(b) Unless restricted by the certificate 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 deemed to be present in person at the meeting.

§10A-2A-8.21. Action without meeting.

(a) Except to the extent that the certificate 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.

(b) 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.

(c) A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.

§10A-2A-8.22. Notice of meeting.

(a) Unless the certificate 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.

(b) Unless the certificate of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors shall be preceded by at least two 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 certificate of incorporation or bylaws.

§10A-2A-8.23. Waiver of notice.

(a) A director may waive any notice required by this chapter, the certificate of incorporation or the bylaws before or after the date and time stated in the notice. Except as provided by subsection (b), the waiver must be in writing, signed by the director entitled to the notice and delivered to the corporation for filing by the corporation with the minutes or corporate records.

(b) 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.

§10A-2A-8.24. Quorum and voting.

(a) Unless the certificate 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 certificate of incorporation or bylaws.

(b) The quorum of the board of directors specified in or fixed in accordance with the certificate of incorporation or bylaws may not consist of less than one-third of the specified or fixed number of directors.

(c) 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 certificate of incorporation or bylaws require the vote of a greater number of directors or unless otherwise expressly provided in this chapter.

(d) A director who is present at a meeting of the board of directors or a committee when corporate action is taken is deemed to have assented to the action taken unless: (i) the director objects at the beginning of the meeting (or promptly upon arrival) to holding it or transacting business at the meeting; (ii) the dissent or abstention from the action taken is entered in the minutes of the meeting; or (iii) 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.

§10A-2A-8.25. Committees of the board.

(a) Unless this chapter, the certificate 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.

(b) The establishment of a board committee and appointment of members to it shall be approved by the greater of (i) a majority of all the directors in office when the action is taken or (ii) the number of directors required by the certificate of incorporation or bylaws to take action under Section 10A-2A-8.24, unless, in either case, this chapter or the certificate of incorporation provides otherwise.

(c) Section 10A-2A-8.20 through Section 10A-2A-8.24 apply to board committees and their members.

(d) A board committee may exercise the powers of the board of directors under Section 10A-2A-8.01, to the extent specified by the board of directors or in the certificate of incorporation or bylaws, except that a board committee may not:

(1) authorize or approve distributions, except according to a formula or method, or within limits, prescribed by the board of directors;

(2) approve or propose to stockholders action that this chapter requires be approved by stockholders;

(3) fill vacancies on the board of directors or, subject to subsection (e), on any board committees; or

(4) adopt, amend, or repeal bylaws or amend or restate the certificate of incorporation.

(e) 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 certificate 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.

§10A-2A-8.26. Submission of matters for stockholder vote.

A corporation may agree to submit a matter to a vote of its stockholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

Division C. DIRECTORS.

§10A-2A-8.30. Standards of conduct for directors.

Notwithstanding Division C of Article 3 of Chapter 1:

(a) Each member of the board of directors, when discharging the duties of a director, shall act: (i) in good faith, and (ii) in a manner the director reasonably believes to be in the best interests of the corporation.

(b) The members of the board of directors or a board committee, when becoming informed in connection with their decision-making 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.

(c) In discharging board of directors or board committee duties, a director shall disclose, or cause to be disclosed, to the other board of directors or board committee members information not already known by them but known by the director to be material to the discharge of their decision-making 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.

(d) In discharging board of directors 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 (f)(1) or subsection (f)(3) to whom the board of directors may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board of directors' functions that are delegable under applicable law.

(e) In discharging board of directors 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 (f).

(f) A director is entitled to rely, in accordance with subsection (d) or (e), on:

(1) 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;

(2) 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

(3) a board committee of which the director is not a member if the director reasonably believes the committee merits confidence.

§10A-2A-8.31. Standards of liability for directors.

Notwithstanding Division C of Article 3 of Chapter 1:

(a) A director shall not be liable to the corporation or its stockholders 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:

(1) no defense interposed by the director based on (i) any provision in the certificate of incorporation authorized by Section 10A-2A-2.02(b)(4) or by Section 10A-2A-2.02(b)(6) or (ii) the protection afforded by Section 10A-2A-8.60, precludes liability; and

(2) the challenged conduct consisted or was the result of:

(i) action not in good faith; or

(ii) a decision

(A) which 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,

(A) which relationship or which 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 to that effect has been established, the director shall 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 that 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 stockholders that is actionable under applicable law.

(b) The party seeking to hold the director liable:

(1) for money damages, shall also have the burden of establishing that:

(i) harm to the corporation or its stockholders has been suffered, and

(ii) the harm suffered was proximately caused by the director's challenged conduct; or

(2) for other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances; or

(3) for other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

(c) Nothing contained in this section shall (i) in any instance where fairness is at issue alter the burden of proving the fact or lack of fairness otherwise applicable, (ii) alter 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 Section 10A-2A-8.32 or a transactional interest under Section 10A-2A-8.60, or (iii) affect any rights to which the corporation or a stockholder may be entitled under another statute of this state or the United States.

§10A-2A-8.32. Directors' liability for unlawful distributions.

(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a) if the party asserting liability establishes that when taking the action the director did not comply with Section 10A-2A-8.30.

(b) A director held liable under subsection (a) for an unlawful distribution is entitled to:

(1) contribution from every other director who could be held liable under subsection (a) for the unlawful distribution; and

(2) recoupment from each stockholder of the pro-rata portion of the amount of the unlawful distribution the stockholder accepted, knowing the distribution was made in violation of Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a).

(c) A proceeding to enforce:

(1) the liability of a director under subsection (a) is barred unless it is commenced within two years after the date (i) on which the effect of the distribution was measured under Section 10A-2A-6.40(e) or (g), (ii) as of which the violation of Section 10A-2A-6.40(a) occurred as the consequence of disregard of a restriction in the certificate of incorporation, or (iii) on which the distribution of assets to stockholders under Section 10A-2A-14.08(a) was made; or

(2) contribution or recoupment under subsection (b) is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a).

Division D. OFFICERS.

§10A-2A-8.40. Officers.

(a) A corporation has the officers described in its certificate of incorporation or bylaws or appointed by the board of directors in accordance with the certificate of incorporation or bylaws.

(b) 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 certificate of incorporation or bylaws or the board of directors.

(c) The certificate of incorporation, 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 Section 10A-2A-16.01(a).

(d) Unless the certificate of incorporation or bylaws provide otherwise, the same individual may simultaneously hold more than one office in a corporation.

§10A-2A-8.41. Functions of officers.

Each officer has the authority and shall perform the functions set forth in the certificate of incorporation or bylaws or, to the extent consistent with the certificate of incorporation or 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.

§10A-2A-8.42. Standards of conduct for officers.

Notwithstanding Division C of Article 3 of Chapter 1:

(a) An officer, when performing in his or her capacity as such, has the duty to act:

(1) in good faith;

(2) with the care that a person in a like position would reasonably exercise under similar circumstances; and

(3) in a manner the officer reasonably believes to be in the best interests of the corporation.

(b) The duty of an officer includes the obligation:

(1) 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 that superior officer, board of directors or board committee; and

(2) to inform his or her superior officer, or 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 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.

(c) In discharging an officer's duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on:

(1) 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

(2) 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.

(d) An officer shall not be liable to the corporation or its stockholders 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 shall have liability will depend in each instance on applicable law, including those principles of Section 10A-2A-8.31 that have relevance.

§10A-2A-8.43. Resignation and removal of officers.

Notwithstanding Division C of Article 3 of Chapter 1:

(a) An officer may resign at any time by delivering a written notice to the board of directors, its chair, the appointing officer, the secretary, or the corporation. A resignation is effective as provided in Section 10A-2A-1.41(i) unless the notice provides for a delayed effectiveness, including effectiveness determined upon 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.

(b) An officer may be removed at any time with or without cause by (i) the board of directors; (ii) the appointing officer, unless the certificate of incorporation, bylaws, or the board of directors provide otherwise; or (iii) any other officer if authorized by the certificate of incorporation, bylaws, or the board of directors.

(c) In this section, "appointing officer" means the officer (including any successor to that officer) who appointed the officer resigning or being removed.

§10A-2A-8.44. Contract rights of officers.

(a) The election or appointment of an officer does not itself create contract rights.

(b) 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.

Division E. INDEMNIFICATION AND ADVANCE FOR EXPENSES.

§10A-2A-8.50. Division definitions.

In this division:

"Corporation" includes any domestic or foreign predecessor entity of a corporation.

"Director" or "officer" means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or 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. A director or 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. "Director" or "officer" includes, unless the context requires otherwise, the estate or personal representative of a director or officer.

"Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or expenses incurred with respect to a proceeding.

"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 Section 10A-2A-8.56, the office in a corporation held by the officer. "Official capacity" does not include service for any other corporation or foreign corporation or any joint venture, trust, employee benefit plan, or other entity.

"Party" means an individual who was, is, or is threatened to be made, a defendant or respondent in a proceeding.

"Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.

§10A-2A-8.51. Permissible indemnification.

(a) 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:

(1) (i) the director conducted himself or herself in good faith; and

(ii) the director reasonably believed:

(A) in the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation; and

(B) in all other cases, that his or her conduct was at least not opposed to the best interests of the corporation; and

(iii) in the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful; or

(2) the director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the certificate of incorporation (as authorized by Section 10A-2A-2.02(b)(5)).

(b) 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 (a)(1)(ii)(B).

(c) 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.

(d) Unless ordered by a court under Section 10A-2A-8.54(a)(3), a corporation may not indemnify a director:

(1) 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 (a); or

(2) 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 he or she was not entitled, regardless of whether it involved action in the director's official capacity.

§10A-2A-8.52. 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 he or she was a director of the corporation against expenses incurred by the director in connection with the proceeding.

§10A-2A-8.53. Advance for expenses.

(a) 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 (i) the director is not entitled to mandatory indemnification under Section 10A-2A-8.52 and (ii) it is ultimately determined under Section 10A-2A-8.54 or Section 10A-2A-8.55 that the director is not entitled to indemnification.

(b) The undertaking required by subsection (a) 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.

(c) Authorizations under this section shall be made:

(1) by the board of directors:

(i) if there are two or more qualified directors, by a majority vote of all the qualified directors (a majority of whom shall for that purpose constitute a quorum) or by a majority of the members of a committee consisting solely of two or more qualified directors appointed by a majority vote of qualified directors; or

(ii) if there are fewer than two qualified directors, by the vote necessary for action by the board of directors in accordance with Section 10A-2A-8.24(c), in which authorization directors who are not qualified directors may participate; or

(2) by the stockholders, but stock 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.

§10A-2A-8.54. Court-ordered indemnification and advance for expenses.

(a) A director who is a party to a proceeding because he or she 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:

(1) order indemnification if the court determines that the director is entitled to mandatory indemnification under Section 10A-2A-8.52;

(2) 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 Section 10A-2A-8.58(a); or

(3) order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable (i) to indemnify the director, or (ii) to advance expenses to the director, even if, in the case of (i) or (ii), he or she has not met the relevant standard of conduct set forth in Section 10A-2A-8.51(a), failed to comply with Section 10A-2A-8.53 or was adjudged liable in a proceeding referred to in Section 10A-2A-8.51(d)(1) or Section 10A-2A-8.51(d)(2), but if the director was adjudged so liable indemnification shall be limited to expenses incurred in connection with the proceeding.

(b) If the court determines that the director is entitled to indemnification under subsection (a)(1) or to indemnification or advance for expenses under subsection (a)(2), 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 (a)(3), it may also order the corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.

§10A-2A-8.55. Determination and authorization of indemnification.

(a) A corporation may not indemnify a director under Section 10A-2A-8.51 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 Section 10A-2A-8.51.

(b) The determination shall be made:

(1) 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 shall for that 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 qualified directors;

(2) by special legal counsel:

(i) selected in the manner prescribed in subsection (b)(1); or

(ii) if there are fewer than two qualified directors, selected by the board of directors (in which selection directors who are not qualified directors may participate); or

(3) by the stockholders, but stock 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.

(c) Authorization of indemnification shall 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 shall be made by those entitled to select special legal counsel under subsection (b)(2)(ii).

§10A-2A-8.56. Indemnification of officers.

(a) A corporation may indemnify and advance expenses under this Division E of this Article 8 to an officer who is a party to a proceeding because he or she is an officer

(1) to the same extent as a director; and

(2) if he or she is an officer but not a director, to such further extent as may be provided by the certificate of incorporation or the bylaws, or by a resolution adopted or a contract approved by the board of directors or stockholders, 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 he or she is not entitled,

(B) an intentional infliction of harm on the corporation or the stockholders, or

(C) an intentional violation of criminal law.

(b) Subsection (a)(2) shall apply to an officer who is also a director if he or she is made a party to the proceeding based on an act or omission solely as an officer.

(c) An officer who is not a director is entitled to mandatory indemnification under Section 10A-2A-8.52, and may apply to a court under Section 10A-2A-8.54 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.

§10A-2A-8.57. 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 corporation 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 this Division E of this Article 8.

§10A-2A-8.58. Variation by corporate action; application of division.

(a) A corporation may, by a provision in its certificate of incorporation, bylaws, or in a resolution adopted or a contract approved by the board of directors or stockholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with Section 10A-2A-8.51 or advance funds to pay for or reimburse expenses in accordance with Section 10A-2A-8.53. Any obligatory provision shall be deemed to satisfy the requirements for authorization referred to in Section 10A-2A-8.53(c) and in Section 10A-2A-8.55(c). Any provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with Section 10A-2A-8.53 to the fullest extent permitted by law, unless the provision expressly provides otherwise.

(b) A right of indemnification or to advances for expenses created by this Division E of this Article 8 or under subsection (a) and in effect at the time of an act or omission shall not be eliminated or impaired with respect to the act or omission by an amendment of the certificate of incorporation, bylaws, or a resolution of the board of directors or stockholders, adopted after the occurrence of the act or omission, unless, in the case of a right created under subsection (a), the provision creating the right and in effect at the time of the act or omission explicitly authorizes elimination or impairment after the act or omission has occurred.

(c) Any provision pursuant to subsection (a) shall 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. Any provision for indemnification or advance for expenses in the certificate of incorporation, bylaws, or a resolution of the board of directors or stockholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by Section 10A-2A-11.07(a)(4).

(d) Subject to subsection (b), a corporation may, by a provision in its certificate of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this Division E of this Article 8.

(e) This Division E of this Article 8 does 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 he or she is not a party.

(f) This Division E of this Article 8 does not limit a corporation's power to indemnify, advance expenses to or provide or maintain insurance on behalf of an employee or agent.

§10A-2A-8.59. Exclusivity of division.

Notwithstanding Division A of Article 6 of Chapter 1, a corporation may provide indemnification or advance expenses to a director or an officer only as permitted by this Division E of this Article 8.

Division F. INTERESTED DIRECTORS; QUORUM.

§10A-2A-8.60. Interested directors; quorum.

(a) No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association, or other entity in which one or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board of directors or committee which authorizes the contract or transaction, or solely because thedirector'sor officer's votes are counted for that purpose, if:

(1) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the qualified directors, even though the qualified directors be less than a quorum; or

(2) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee, or the stockholders.

(b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.

ARTICLE 9. CONVERSIONS.

Division A. ARTICLE DEFINITIONS.

§10A-2A-9.01. Definitions.

As used in this Article 9:

Notwithstanding Section 10A-1-1.03, as used in this article, unless the context otherwise requires, the following terms have the following meanings:

(1) "Converted organization" means the organization into which a converting organization converts pursuant to this article.

(2) "Converting corporation" means a converting organization that is a corporation.

(3) "Converting organization" means an organization that converts into another organization pursuant to this article.

(4) "Governing statute" of an organization means the statute that governs the organization's internal affairs.

(5) "Organization" means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; nonprofit corporation; professional corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit.

(6) "Organizational documents" means:

(A) for a general partnership or foreign general partnership, its partnership agreement and if applicable, its registration as a limited liability partnership or a foreign limited liability partnership;

(B) for a limited partnership or foreign limited partnership, its certificate of formation and partnership agreement, or comparable writings as provided in its governing statute;

(C) for a limited liability company or foreign limited liability company, its certificate of formation and limited liability company agreement, or comparable writings as provided in its governing statute;

(D) for a business or statutory trust or foreign business or statutory trust its agreement of trust and declaration of trust, or comparable writings as provided in its governing statute;

(E) for a corporation for profit or foreign corporation for profit, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of incorporation, bylaws, and other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(G) for a professional corporation or foreign professional corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute, or comparable writings as provided in its governing statute; and

(H) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

Division B. CONVERSION.

§10A-2A-9.11. Conversion.

(a) An organization other than a corporation may convert to a corporation, and a corporation may convert to an organization other than a corporation pursuant to this article, and a plan of conversion, if:

(1) the governing statute of the organization that is not a corporation authorizes the conversion;

(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and

(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.

(b) A plan of conversion must be in writing and must include:

(1) the name, type of organization, and mailing address of the principal office of the converting organization and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;

(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in Section 10A-9A-10.02(c); and

(4) the organizational documents of the converted organization.

(c) In connection with a conversion, rights or securities of or interests in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

(d) In addition to the requirements of subsection (a), a plan of conversion may contain any other provision not prohibited by law.

(e) The terms of a plan of conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with Section 10A-2A-1.20(c).

§10A-2A-9.12. Action on a plan of conversion.

In the case of a conversion of a corporation the plan of conversion shall be adopted in the following manner:

(a) The plan of conversion shall first be adopted by the board of directors.

(b) The plan of conversion shall then be approved by the stockholders. In submitting the plan of conversion to the stockholders for their approval, the board of directors must recommend that the stockholders 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 a recommendation, or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for approval of the plan of conversion by the stockholders or the effectiveness of the plan of conversion.

(d) If the approval of the stockholders is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders 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 organizational documents of the converted organization which are to be in writing as they will be in effect immediately after the conversion.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of conversion requires (i) the approval of the stockholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan, and (ii) the approval of each class or series of stock voting as a separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the plan by that voting group.

(f) If as a result of the conversion one or more stockholders of the converting corporation would become subject to personal liability, approval of the plan of conversion shall require the signing in connection with the transaction, by each stockholder who would become subject to personal liability, of a separate written consent to become subject to personal liability.

§10A-2A-9.13. Statement of conversion; effectiveness.

(a) After a plan of conversion is approved:

(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-1-4.01 and which must include:

(A) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any;

(B) the date of the filing of the certificate of formation of the converting organization, if any, and all prior amendments and the filing office or offices, if any, where the certificate of formation and amendments are filed;

(C) a statement that the converting organization has been converted into the converted organization;

(D) the name and type of organization of the converted organization and the jurisdiction of its governing statute;

(E) the street and mailing address of the principal office of the converted organization;

(F) the date the conversion is effective under the governing statute of the converted organization;

(G) a statement that the conversion was approved as required by this chapter;

(H) a statement that the conversion was approved as required by the governing statute of the converted organization;

(I) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request and without cost, to any owner of the converting organization; and

(J) if the converted organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-2A-9.15(b); and

(2) if the converted organization is a corporation, the converting organization shall deliver for filing a certificate of incorporation in accordance with subsection (d), which certificate of incorporation must include, in addition to the information required by Section 10A-2A-2.02:

(A) a statement that the corporation was converted from the converting organization;

(B) the name and type of organization of the converting organization, the jurisdiction of the converting organization's governing statute, and the converting organization's unique identifying number or other designation as assigned by the Secretary of State, if any; and

(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

(b) A conversion becomes effective:

(1) if the converted organization is a corporation, when the certificate of incorporation takes effect; and

(2) if the converted organization is not a corporation, as provided by the governing statute of the converted organization.

(c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall deliver for filing the statement of conversion required under subsection (a)(1) to the Secretary of State.

(d) If the converted organization is a corporation, then, the converting organization shall deliver for filing the certificate of incorporation required under subsection (a)(2) to the Secretary of State.

(e) If the converting organization is required to deliver for filing a statement of conversion and a certificate of formation to the Secretary of State, then the converting organization shall deliver for filing the statement of conversion and the certificate of formation to the Secretary of State simultaneously.

(f) After a conversion becomes effective, if the converted organization is a corporation, then, except for certified copies of the statement of conversion permitted to be delivered to the judge of probate for filing pursuant to subsection (h), all filing instruments required to be filed under this title regarding that converted organization shall be delivered for filing to the Secretary of State.

(g) If:

(1) the converting organization is a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

(2) the converted organization will be a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

(3) the name of the converting organization and the converted organization are to be the same, other than words, phrases or abbreviations indicating the type of entity; and

(4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purposes of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization.

(h) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing with the judge of probate shall evidence chain of title, but lack of filing shall not affect the converted organization's title to such real property.

(i) A statement of conversion is a filing instrument under Chapter 1.

(j) The filing fees for a statement of conversion shall be as set forth in Chapter 1.

§10A-2A-9.14. Amendment of plan of conversion; abandonment.

(a) A plan of conversion of a converting organization that is a corporation may be amended:

(1) 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

(2) in the manner provided in the plan, except that if the plan has been approved by the stockholders that were entitled to vote on, consent to, or approve of the plan, then those stockholders are entitled to vote on, consent to, or approve of 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 of the foregoing, to be received by any of the stockholders of the converting corporation under the plan;

(ii) the organizational documents of the converted organization that will be in effect immediately after the conversion becomes effective, except for changes that do not require approval of the eligible interest holders of the converted organization under its governing statute or organizational documents; or

(iii) any other terms or conditions of the plan, if the change would adversely affect the stockholders in any material respect.

(b) After a plan of conversion has been approved by a converting organization that is a corporation in the manner required by this Division B of this Article 9 and before the statement of conversion becomes effective, the plan may be abandoned by the corporation without action by its stockholders 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.

(c) If a conversion is abandoned after the statement of conversion has been delivered to the Secretary of State for filing and before the statement of conversion becomes effective, a statement of abandonment, signed by the converting organization, must be delivered to the Secretary of State for filing before the statement of conversion becomes effective. The statement of abandonment takes effect on filing, and the conversion is abandoned and does not become effective. The statement of abandonment must contain:

(1) the name of the converting organization;

(2) the date on which the statement of conversion were filed by the Secretary of State; and

(3) a statement that the conversion has been abandoned in accordance with this section.

§10A-2A-9.15. Effect of conversion.

(a) When a conversion takes effect:

(1) all property and contract rights owned by the converting organization remain vested in the converted organization without transfer, reversion or impairment and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion;

(2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion;

(3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred and the name of the converted organization may, but need not, be substituted for the name of the converting organization in any pending action or proceeding;

(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect;

(6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization;

(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities and duties of the converting organization, shall be the rights, privileges, powers, interests in property, debts, liabilities and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization;

(8) if the converted organization is a corporation, for all purposes of the laws of this state, the corporation shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a corporation;

(9) if the converted organization is a corporation, the existence of the corporation shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion;

(11) if the Secretary of State has assigned a unique identifying number or other designation to the converting organization and (i) the converted organization is formed pursuant to, or its internal affairs are governed by, the laws of this state or (ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this State, then that unique identifying number or other designation shall continue to be assigned to the converted organization; and

(12) the stock or eligible interests of the converting organization are reclassified into stock, eligible interests or other securities, obligations, rights to acquire stock, eligible interests or other securities, cash, or other property in accordance with the terms of the conversion, and the stockholders or interest holders of the converting organization are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the governing statute of the converting organization.

(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation or other liability for which the converting corporation, is liable if, before the conversion, the converting corporation was subject to suit in this state on the debt, obligation or other liability or was subject to pay amounts to its stockholders under Article 13. If a converted organization is a foreign entity and fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

(c) When the converting organization is a corporation and the conversion becomes effective, the converted organization is deemed to agree that it will promptly pay the amount, if any, to which the stockholders of the converting corporation are entitled under Article 13.

§10A-2A-9.16. Nonexclusive.

This article is not exclusive. This article does not preclude a corporation from converting under law other than this chapter.

ARTICLE 10. AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS.

Division A. AMENDMENT OF CERTIFICATE OF INCORPORATION.

§10A-2A-10.01. Authority to amend.

(a) A corporation may amend its certificate of incorporation at any time to add or change a provision that is required or permitted in the certificate of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the certificate of incorporation. Whether a provision is required or permitted in the certificate of incorporation is determined as of the effective date of the amendment.

(b) A stockholder of the corporation does not have a vested property right resulting from any provision in the certificate of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

§10A-2A-10.02. Amendment before issuance of stock.

If a corporation has not yet issued stock, its board of directors, or its incorporators if it has no board of directors, may adopt one or more amendments to the corporation's certificate of incorporation.

§10A-2A-10.03. Amendment by board of directors and stockholders.

If a corporation has issued stock, an amendment to the certificate of incorporation shall be adopted in the following manner:

(a) The proposed amendment shall first be adopted by the board of directors.

(b) Except as provided in Sections 10A-2A-10.05, 10A-2A-10.07, and 10A-2A-10.08, the amendment shall then be approved by the stockholders. In submitting the proposed amendment to the stockholders for approval, the board of directors shall recommend that the stockholders 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 a recommendation, or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors must inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for the approval of the amendment by the stockholders or the effectiveness of the amendment.

(d) If the amendment is required to be approved by the stockholders, and the approval is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders 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.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the amendment requires the approval of the stockholders at a meeting at which a quorum consisting of a majority of the votes entitled to be cast on the amendment exists, and, if any class or series of stock is entitled to vote as a separate group on the amendment, except as provided in Section 10A-2A-10.04(c), the approval of each separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the amendment by that voting group.

(f) If as a result of an amendment of the certificate of incorporation one or more stockholders of a corporation would become subject to new personal liability, approval of the amendment requires the signing in connection with the amendment, by each stockholder who will become subject to new personal liability, of a separate written consent to become subject to new personal liability, unless in the case of a stockholder that already has personal liability the terms and conditions of the new personal liability (i) are substantially identical to those of the existing personal liability, or (ii) are substantially identical to those of the existing personal liability (other than changes that eliminate or reduce existing personal liability).

(g) For purposes of subsection (f) and Section 10A-2A-10.09, "new personal liability" means personal liability of a person resulting from an amendment of the certificate of incorporation if (i) the person did not have personal liability before the amendment becomes effective, or (ii) the person had personal liability before the amendment becomes effective, the terms and conditions of which are changed when the amendment becomes effective.

§10A-2A-10.04. Voting on amendments by voting groups.

(a) The holders of the outstanding stock of a class are entitled to vote as a separate voting group (if stockholder voting is otherwise required by this chapter) on a proposed amendment to the certificate of incorporation if the amendment would:

(1) effect an exchange or reclassification of all or part of the stock of the class into stock of another class;

(2) effect an exchange or reclassification, or create the right of exchange, of all or part of the stock of another class into stock of the class;

(3) change the rights, preferences, or limitations of all or part of the stock of the class;

(4) change the stock of all or part of the class into a different number of shares of stock of the same class;

(5) create a new class of stock having rights or preferences with respect to distributions that are prior or superior to the stock of the class;

(6) increase the rights, preferences, or number of authorized shares of stock 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 stock of the class;

(7) limit or deny an existing preemptive right of all or part of the stock of the class; or

(8) cancel or otherwise affect rights to distributions that have accumulated but not yet been authorized on all or part of the stock of the class.

(b) If a proposed amendment would affect a series of a class of stock in one or more of the ways described in subsection (a), the holders of stock of that series are entitled to vote as a separate voting group on the proposed amendment.

(c) If a proposed amendment that entitles the holders of two or more classes or series of stock 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 stock 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 certificate of incorporation or added as a condition by the board of directors pursuant to Section 10A-2A-10.03(c).

(d) A class or series of stock is entitled to the voting rights granted by this section even if the certificate of incorporation provides that the stock is nonvoting stock.

§10A-2A-10.05. Amendment by board of directors.

Unless the certificate of incorporation provides otherwise, a corporation's board of directors may adopt amendments to the corporation's certificate of incorporation without stockholder approval:

(a) to extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

(b) to delete the names and addresses of the incorporators or initial directors;

(c) 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;

(d) if the corporation has only one class of stock outstanding:

(1) to change each issued and unissued authorized share of stock of the class into a greater number of whole shares of stock of that class; or

(2) to increase the number of authorized shares of stock of the class to the extent necessary to permit the issuance of stock as a stock dividend;

(e) to change the corporate name, provided that the name complies with Article 5 of Chapter 1;

(f) to reflect a reduction in authorized stock, as a result of the operation of Section 10A-2A-6.31(b), when the corporation has acquired its own stock and the certificate of incorporation prohibits the reissue of the acquired stock;

(g) to delete a class of stock from the certificate of incorporation, as a result of the operation of Section 10A-2A-6.31(b), when there is no remaining stock of the class because the corporation has acquired all stock of the class and the certificate of incorporation prohibits the reissue of the acquired stock; or

(h) to take actions expressly permitted by Section 10A-2A-6.02 to be made without stockholder approval.

§10A-2A-10.06. Certificate of amendment.

Notwithstanding Division B of Article 3 of Chapter 1:

(a) After an amendment to the certificate of incorporation has been adopted and approved in the manner required by this chapter and by the certificate of incorporation, the corporation shall deliver to the Secretary of State for filing a certificate of amendment, which must set forth:

(1) the name of the corporation;

(2) the text of each amendment adopted, or the information required by Section 10A-2A-1.20(c)(5);

(3) if an amendment provides for an exchange, reclassification, or cancellation of issued stock, provisions for implementing the amendment if not contained in the amendment itself, (which may be made dependent upon facts objectively ascertainable outside the certificate of amendment in accordance with Section 10A-2A-1.20(c)(5);

(4) the date of each amendment's adoption; and

(5) if an amendment:

(i) was adopted by the incorporators or board of directors without stockholder approval, a statement that the amendment was duly adopted by the incorporators or by the board of directors, as the case may be, and that stockholder approval was not required;

(ii) required approval by the stockholders, a statement that the amendment was duly approved by the stockholders in the manner required by this chapter and by the certificate of incorporation; or

(iii) is being filed pursuant to Section 10A-2A-1.20(c)(5), a statement to that effect.

(b) A certificate of amendment shall take effect at the effective date determined in accordance with Article 4 of Chapter 1.

§10A-2A-10.07. Restated certificate of incorporation.

Notwithstanding Division B of Article 3 of Chapter 1:

(a) A corporation's board of directors may restate its certificate of incorporation at any time, without stockholder approval, to consolidate all amendments into a single document.

(b) If the restated certificate of incorporation includes one or more new amendments that require stockholder approval, the amendments shall be adopted and approved as provided in Section 10A-2A-10.03.

(c) A corporation that restates its certificate of incorporation shall deliver to the Secretary of State for filing a certificate of restatement setting forth:

(1) the name of the corporation;

(2) the text of the restated certificate of incorporation;

(3) a statement that the restated certificate of incorporation consolidates all amendments into a single document; and

(4) if a new amendment is included in the restated certificate of incorporation, the statements required under Section 10A-2A-10.06 with respect to the new amendment.

(d) The duly adopted restated certificate of incorporation supersedes the original certificate of incorporation and all amendments to the certificate of incorporation.

(e) The Secretary of State may certify the restated certificate of incorporation as the certificate of incorporation currently in effect, without including the statements required by subsection (c)(4).

§10A-2A-10.08. Amendment pursuant to reorganization.

Notwithstanding Division B of Article 3 of Chapter 1:

(a) A corporation's certificate of incorporation may be amended without action by the board of directors or stockholders 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 if the certificate of incorporation after the amendment only contains provisions required or permitted by Section 10A-2A-2.02.

(b) The individual or individuals designated by the court shall deliver to the Secretary of State for filing a certificate of amendment setting forth:

(1) the name of the corporation;

(2) the text of each amendment approved by the court;

(3) the date of the court's order or decree approving the certificate of amendment;

(4) the title of the reorganization proceeding in which the order or decree was entered; and

(5) a statement that the court had jurisdiction of the proceeding under federal statute.

(c) Stockholders of a corporation undergoing reorganization do not have dissenters' rights except as and to the extent provided in the reorganization plan.

(d) 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.

§10A-2A-10.09. Effect of amendment.

(a) An amendment to the certificate 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 stockholders. An amendment changing a corporation's name does not affect a proceeding brought by or against the corporation in its former name.

(b) A stockholder who becomes subject to new personal liability in respect of the corporation as a result of an amendment to the certificate of incorporation shall have that new personal liability only in respect of interest holder liabilities that arise after the amendment becomes effective.

(c) Except as otherwise provided in the certificate of incorporation of the corporation, the personal liability of a stockholder who had personal liability in respect of the corporation before the amendment becomes effective and has new personal liability after the amendment becomes effective shall be as follows:

(1) The amendment does not discharge that prior personal liability with respect to any interest holder liabilities that arose before the amendment becomes effective.

(2) The provisions of the certificate of incorporation relating to personal liability as in effect immediately prior to the amendment shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subsection (c)(1), as if the amendment had not occurred.

(3) The stockholder shall have the rights of contribution from other persons as are provided by the certificate of incorporation relating to personal liability as in effect immediately prior to the amendment with respect to any interest holder liabilities preserved by subsection (c)(1), as if the amendment had not occurred.

(4) The stockholder shall not, by reason of any prior personal liability, have personal liability with respect to any interest holder liabilities that arise after the amendment becomes effective.

Division B. AMENDMENT OF BYLAWS.

§10A-2A-10.20. Authority to amend.

(a) A corporation's stockholders may amend or repeal the corporation's bylaws.

(b) A corporation's board of directors may amend or repeal the corporation's bylaws, unless:

(1) the certificate of incorporation, Section 10A-2A-10.21 or, if applicable, Section 10A-2A-10.22, reserves that power exclusively to the stockholders in whole or part; or

(2) except as provided in Section 10A-2A-2.05(d), the stockholders in amending, repealing, or adopting a bylaw expressly provide that the board of directors may not amend, repeal, or adopt that bylaw.

(c) A stockholder of the corporation does not have a vested property right resulting from any provision in the bylaws.

§10A-2A-10.21. Bylaw increasing quorum or voting requirement for directors or requiring a meeting place.

(a) A bylaw that increases a quorum or voting requirement for the board of directors or that requires a meeting of stockholders to be held at a place may be amended or repealed:

(1) if originally adopted by the stockholders, only by the stockholders, unless the bylaw otherwise provides; or

(2) if adopted by the board of directors, either by the stockholders or by the board of directors.

(b) A bylaw adopted or amended by the stockholders 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 stockholders or the board of directors.

(c) Action by the board of directors under subsection (a) to amend or repeal a bylaw that changes a quorum or voting requirement for the board of directors shall 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.

§10A-2A-10.22. Bylaw provisions relating to the election of directors.

(a) Unless the certificate of incorporation (i) specifically prohibits the adoption of a bylaw pursuant to this section, (ii) alters the vote specified in Section 10A-2A-7.28(a), or (iii) provides for cumulative voting, a corporation may elect in its bylaws to be governed in the election of directors as follows:

(1) 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 stockholder may indicate an abstention, but without cumulating the votes;

(2) to be elected, a nominee shall have received a plurality of the votes cast by holders of stock 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 shall terminate on the date that is the earlier of (i) 90 days from the date on which the voting results are determined pursuant to Section 10A-2A-7.29(b)(5) or (ii) the date on which an individual is selected by the board of directors to fill the office held by that director, which selection shall be deemed to constitute the filling of a vacancy by the board of directors to which Section 10A-2A-8.10 applies. Subject to subsection (a)(3), a nominee who is elected but receives more votes against than for election shall not serve as a director beyond the 90-day period referenced above; and

(3) 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.

(b) Subsection (a) does not apply to an election of directors by a voting group if (i) at the expiration of the time fixed under a provision requiring advance notification of director candidates, or (ii) absent that provision, at a time fixed by the board of directors which 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 stockholders. An individual shall not be considered a candidate for purposes of this subsection 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.

(c) A bylaw electing to be governed by this section may be repealed:

(1) if originally adopted by the stockholders, only by the stockholders, unless the bylaw otherwise provides;

(2) if adopted by the board of directors, by the board of directors or the stockholders.

ARTICLE 11. MERGERS AND STOCK EXCHANGES.

§10A-2A-11.01. Definitions.

Notwithstanding Section 10A-1-1.03, as used in this article, unless the context otherwise requires, the following terms mean:

(1) "Acquired entity" means the corporation or foreign corporation that will have all of one or more classes or series of its stock acquired in a stock exchange.

(2) "Acquiring entity" means the corporation or foreign corporation that will acquire all of one or more classes or series of stock of the acquired entity in a stock exchange.

(3) "Constituent corporation" means a constituent organization that is a corporation.

(4) "Constituent organization" means an organization that is party to a merger under this article.

(5) "Governing statute" of an organization means the statute that governs the organization's internal affairs.

(6) "Organization" means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; nonprofit corporation; professional corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit.

(7) "Organizational documents" means:

(A) for a general partnership or foreign general partnership, its partnership agreement and if applicable, its registration as a limited liability partnership or a foreign limited liability partnership;

(B) for a limited partnership or foreign limited partnership, its certificate of formation and partnership agreement, or comparable writings as provided in its governing statute;

(C) for a limited liability company or foreign limited liability company, its certificate of formation and limited liability company agreement, or comparable writings as provided in its governing statute;

(D) for a business or statutory trust or foreign business or statutory trust its agreement of trust and declaration of trust, or comparable writings as provided in its governing statute;

(E) for a corporation or foreign corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of incorporation, bylaws, and other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(G) for a professional corporation or foreign professional corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute, or comparable writings as provided in its governing statute; and

(H) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

(8) "New personal liability" means personal liability of a person, resulting from a merger or stock exchange, that is (i) (A) in respect of an entity which is different from the entity in which the person held stock or eligible interests immediately before the merger became effective, or (B) in respect of an entity which is different from the entity in which the person held stock immediately before the stock exchange became effective; or (ii) in respect of the same entity as the one in which the person held stock or eligible interests immediately before the merger became effective if (A) the person did not have personal liability immediately before the merger became effective, or (B) the person had personal liability immediately before the merger became effective, the terms and conditions of which were changed when the merger became effective; or (iii) in respect of the same entity as the one in which the person held stock immediately before the stock exchange became effective if (A) the person did not have personal liability immediately before the stock exchange became effective, or (B) the person had personal liability immediately before the stock exchange became effective, the terms and conditions of which were changed when the stock exchange became effective.

(9) "Surviving organization" means an organization into which one or more other organizations are merged under this article, whether the organization pre-existed the merger or was created pursuant to the merger.

§10A-2A-11.02. Merger.

(a) A corporation may merge with one or more other constituent organizations pursuant to this article, and a plan of merger, if:

(1) the governing statute of each of the other organizations authorizes the merger;

(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and

(3) each of the other organizations complies with its governing statute in effecting the merger.

(b) A plan of merger must be in writing and must include:

(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each constituent organization;

(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

(3) the terms and conditions of the merger, including the manner and basis for converting the stock or eligible interests in each constituent organization into any combination of money, stock, eligible interests in the surviving organization, and other consideration as allowed by subsection (c);

(4) if the surviving organization is to be created pursuant to the merger, the surviving organization's organizational documents; and

(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization's organizational documents.

(c) In connection with a merger, rights, securities, stock, or eligible interests in a constituent organization may be exchanged for or converted into cash, property, rights, securities, stock, or eligible interests in the surviving organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights, securities, stock, or eligible interests in another organization or may be cancelled.

(d) In addition to the requirements of subsection (b), a plan of merger may contain any other provision not prohibited by law.

(e) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 10A-2A-1.20(c).

(f) A plan of merger may be amended only with the consent of each constituent organization, except as provided in the plan. A domestic constituent organization may approve an amendment to a plan:

(1) 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

(2) in the manner provided in the plan, except that if the plan has been approved by the stockholders, members, or interest holders that were entitled to vote on, consent to, or approve of, the plan, then those stockholders, members, or interest holders are entitled to vote on, consent to, or approve of any amendment of the plan that will change:

(i) the amount or kind of stock or other securities, eligible interests, obligations, rights to acquire stock, other securities or eligible interests, cash, or other property to be received under the plan by the stockholders, members, or interest holders of a constituent organization;

(ii) the certificate of incorporation of any corporation, foreign corporation, nonprofit corporation, foreign nonprofit corporation or the organizational documents of any unincorporated entity or foreign unincorporated entity, that will be the surviving organization, except for changes permitted by Section 10A-2A-10.05 or by comparable provisions of the governing statute of the foreign corporation, nonprofit corporation, foreign nonprofit corporation, unincorporated entity or foreign unincorporated entity; or

(iii) any of the other terms or conditions of the plan if the change would adversely affect the stockholders, members, or interest holders in any material respect.

§10A-2A-11.03. Stock exchange.

(a) By complying with this Article 11:

(1) a corporation may acquire all of the stock of one or more classes or series of stock, of another corporation or foreign corporation, in exchange for stock or other securities, obligations, rights to acquire stock or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of stock exchange; or

(2) all of the stock of one or more classes or series of stock of a corporation may be acquired by another corporation or foreign corporation, in exchange for stock or other securities, obligations, rights to acquire stock or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of stock exchange.

(b) A foreign corporation may be the acquired entity in a stock exchange only if the stock exchange is permitted by the governing statute of that foreign corporation.

(c) The plan of stock exchange must include:

(1) the name of each corporation or foreign corporation the stock of which will be acquired, the name of the corporation or foreign corporation that will acquire that stock, and the respective unique identifying numbers or other designations as assigned by the Secretary of State, if any, of the corporation or foreign corporation;

(2) the terms and conditions of the stock exchange;

(3) the manner and basis of exchanging stock of a corporation or foreign corporation, the stock of which will be acquired under the stock exchange for stock or other securities, obligations, rights to acquire stock, other securities, cash, other property, or any combination of the foregoing; and

(4) any other provisions required by the governing statute governing the acquired entity or its certificate of incorporation or organizational documents.

(d) Terms of a plan of stock exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 10A-2A-1.20(c).

(e) A plan of stock exchange may be amended only with the consent of each party to the stock exchange, except as provided in the plan. A corporation may approve an amendment to a plan:

(1) 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

(2) in the manner provided in the plan, except that if the plan has been approved by the stockholders that were entitled to vote on, consent to, or approve of the plan then those stockholders are entitled to vote on, consent to, or approve of any amendment of the plan that will change:

(i) the amount or kind of stock or other securities, obligations, rights to acquire stock, other securities, cash, or other property to be received under the plan by the stockholders of the acquired entity; or

(ii) any of the other terms or conditions of the plan if the change would adversely affect the stockholders in any material respect.

§10A-2A-11.04. Action on a plan of merger or stock exchange.

In the case of a corporation that is a constituent organization or the acquired entity in a stock exchange, the plan of merger or stock exchange shall be adopted in the following manner:

(a) The plan of merger or stock exchange shall first be adopted by the board of directors.

(b) Except as provided in subsections (h), (j), and (l) and in Section 10A-2A-11.05, the plan of merger or stock exchange shall then be approved by the stockholders. In submitting the plan of merger or stock exchange to the stockholders for approval, the board of directors shall recommend that the stockholders approve the plan or, in the case of an offer referred to in subsection (j)(2), that the stockholders tender their stock 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 a recommendation or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for the approval of the plan of merger or stock exchange by the stockholders or the effectiveness of the plan of merger or stock exchange.

(d) If the plan of merger or stock exchange is required to be approved by the stockholders, and if the approval is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders 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 corporation, foreign corporation, or eligible entity, the notice must also include or be accompanied by a copy or summary of the certificate of incorporation and bylaws or the organizational documents of that corporation, foreign corporation, or eligible entity. If the corporation is to be merged with a corporation, foreign corporation, or eligible entity and a new corporation, foreign corporation, or eligible entity is to be created pursuant to the merger, the notice must include or be accompanied by a copy or a summary of the certificate of incorporation and bylaws or the organizational documents of the new corporation, foreign corporation, or eligible entity.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of merger or stock exchange requires the approval of the stockholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan, and, if any class or series of stock is entitled to vote as a separate group on the plan of merger or stock exchange, the approval of each separate voting group at a meeting at which a quorum of the voting group is present consisting of a majority of the votes entitled to be cast on the merger or stock exchange by that voting group.

(f) Subject to subsection (g), separate voting by voting groups is required:

(1) on a plan of merger, by each class or series of stock that:

(i) are to be converted under the plan of merger into stock, other securities, eligible interests, obligations, rights to acquire stock, other securities or eligible interests, cash, other property, or any combination of the foregoing; or

(ii) are entitled to vote as a separate group on a provision in the plan that constitutes a proposed amendment to the certificate of incorporation of a surviving corporation that requires action by separate voting groups under Section 10A-2A-10.04;

(2) on a plan of stock exchange, by each class or series of stock included in the exchange, with each class or series constituting a separate voting group; and

(3) on a plan of merger or stock exchange, if the voting group is entitled under the certificate of incorporation to vote as a voting group to approve a plan of merger or stock exchange, respectively.

(g) The certificate of incorporation may expressly limit or eliminate the separate voting rights provided in subsection (f)(1)(i) and subsection (f)(2) as to any class or series of stock, except when the plan of merger or stock exchange (i) includes what is or would be in effect an amendment subject to subsection (f)(1)(ii), and (ii) will not effect a substantive business combination.

(h) Unless the certificate of incorporation otherwise provides, approval by the corporation's stockholders of a plan of merger is not required if:

(1) the corporation will survive the merger;

(2) except for amendments permitted by Section 10A-2A-10.05, its certificate of incorporation will not be changed; and

(3) each stockholder of the corporation whose stock was outstanding immediately before the effective date of the merger or stock exchange will hold the same number of shares of stock, with identical preferences, rights and limitations, immediately after the effective date of the merger.

(i) If as a result of a merger or stock exchange one or more stockholders of a corporation will have new personal liability with respect to the surviving organization or the acquiring entity, approval of the plan of merger or stock exchange will be ineffective without the consent to the plan of merger or stock exchange of the stockholder who will have new personal liability. A stockholder does not give consent required in this subsection (i) merely by consenting to a provision in the certification of incorporation, the bylaws, or an agreement of the stockholders, that allows for a plan of merger or stock exchange to impose new personal liability on that stockholder without that stockholder's consent at the time of the plan of merger or stock exchange.

(j) Unless the certificate of incorporation otherwise provides, approval by the stockholders of a plan of merger or stock exchange is not required if:

(1) the plan of merger or stock exchange expressly (i) permits or requires the merger or stock exchange to be effected under this subsection and (ii) provides that, if the merger or stock exchange is to be effected under this subsection, the merger or stock exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (j)(6);

(2) another party to the merger, the acquiring entity in the stock exchange, or a parent of another party to the merger or the acquiring entity in the stock exchange, makes an offer to purchase, on the terms provided in the plan of merger or stock exchange, any and all of the outstanding stock of the corporation that, absent this subsection, would be entitled to vote on the plan of merger or stock exchange, except that the offer may exclude stock of the corporation that is 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 the foregoing;

(3) the offer discloses that the plan of merger or stock exchange provides that the merger or stock exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (j)(6) and that the stock of the corporation that is not tendered in response to the offer will be treated as set forth in subsection (j)(8);

(4) the offer remains open for at least 10 days;

(5) the offeror purchases all stock properly tendered in response to the offer and not properly withdrawn;

(6) the stock listed below is collectively entitled to cast at least the minimum number of votes on the merger or stock exchange that, absent this subsection, would be required by this Article 11 and by the certificate of incorporation for the approval of the merger or stock exchange by the stockholders, and by any other voting group entitled to vote on the merger or stock exchange at a meeting at which all stock entitled to vote on the approval was present and voted, and with the consent of the stockholders required under Section 10A-2A-11.04(i):

(i) stock purchased by the offeror in accordance with the offer;

(ii) stock otherwise owned by the offeror or by any parent of the offeror or any wholly owned subsidiary of any of the foregoing; and

(iii) stock subject to an agreement that the stock is to be transferred, contributed or delivered to the offeror, any parent of the offeror, or any wholly owned subsidiary of any of the foregoing in exchange for stock or eligible interests in the offeror, parent or subsidiary;

(7) the offeror or a wholly owned subsidiary of the offeror merges with or into, or effects a stock exchange in which it acquires stock of, the corporation; and

(8) each outstanding share of stock of each class or series of stock 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 stock 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 stock of that class or series of stock that is tendered in response to the offer, except that stock of the corporation that is owned by the corporation or that are described in clause (ii) or (iii) of subsection (j)(6) need not be converted into or exchanged for the consideration described in this subsection (j)(8).

(k) As used in subsection (j):

(1) "offer" means the offer referred to in subsection (j)(2);

(2) "offeror" means the person making the offer;

(3) "parent" of an entity means a person that owns, directly or indirectly (through one or more wholly owned subsidiaries), all of the outstanding stock of or eligible interests in that entity;

(4) stock tendered in response to the offer shall be deemed to have been "purchased" in accordance with the offer at the earliest time as of which (i) the offeror has irrevocably accepted that stock for payment and (ii) either (A) in the case of stock represented by certificates, the offeror, or the offeror's designated depository or other agent, has physically received the certificates representing that stock or (B) in the case of stock without certificates, that stock has been transferred into the account of the offeror or its designated depository or other agent, or an agent's message relating to that stock has been received by the offeror or its designated depository or other agent; and

(5) "wholly owned subsidiary" of a person means an entity of or in which that person owns, directly or indirectly (through one or more wholly owned subsidiaries), all of the outstanding stock or eligible interests.

(l) Unless the certificate of incorporation otherwise provides,

(1) approval of a plan of stock exchange by the stockholders of a corporation is not required if the corporation is the acquiring entity in the stock exchange; and

(2) stock not to be exchanged under the plan of stock exchange is not entitled to vote on the plan.

§10A-2A-11.05. Merger between parent and subsidiary or between subsidiaries.

(a) A domestic or foreign parent entity that owns stock of a corporation which carries at least 90 percent of the voting power of each class and series of the outstanding stock of that subsidiary corporation that has voting power may (i) merge that subsidiary corporation into itself (if it is a corporation, foreign corporation, or eligible entity), (ii) merge that subsidiary corporation into another corporation, foreign corporation, or eligible entity in which the parent entity owns at least 90 percent of the voting power of each class and series of the outstanding stock or eligible interests which have voting power, or (iii) merge itself (if it is a corporation, foreign corporation, or eligible entity) into that subsidiary corporation, in any case without the approval of the board of directors or stockholders of that subsidiary corporation, unless the certificate of incorporation or organizational documents of the parent entity or the certificate of incorporation of that subsidiary corporation otherwise provide. The certificate of incorporation, organizational documents, and the governing statute of the parent entity and the other corporation, foreign corporation or eligible entity into which the parent entity intends to merge the subsidiary corporation under clause (ii) of this subsection (a) shall determine the necessary consent or approval required for the merger. Section 10A-2A-11.04(i) applies to a merger under this section. The statement of merger relating to a merger under this section does not need to be signed by the subsidiary corporation.

(b) A parent entity shall, within 10 days after the effective date of a merger approved under subsection (a), notify each of the subsidiary corporation's stockholders that the merger has become effective.

(c) Except as provided in subsections (a) and (b), a merger between a parent entity and a subsidiary corporation shall, as to the subsidiary corporation and a parent entity that is a corporation, be governed by the provisions of Article 11 applicable to mergers generally, and as to a parent entity that is not a corporation, be governed by the organizational documents and governing statute of that parent entity.

§10A-2A-11.06. Statement of merger or stock exchange.

(a) After a plan of merger has been adopted and approved as required by this article, then a statement of merger shall be signed by each party to the merger except as provided in Section 10A-2A-11.05(a). The statement of merger must set forth:

(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each constituent organization;

(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

(3) the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, and where the certificate of formation is filed of each constituent organization which was formed under the laws of this state;

(4) the date the merger is effective under the governing statute of the surviving organization;

(5) if the surviving organization is to be created pursuant to the merger:

(A) if it will be a corporation, the corporation's certificate of incorporation; or

(B) if it will be an organization other than a corporation, any organizational document that creates the organization that is required to be in a public writing or in the case of a limited liability partnership, its statement of limited liability partnership;

(6) if the surviving organization exists before the merger, any amendments provided for in the plan of merger for the organizational document that created the organization that are in a public writing;

(7) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

(8) if the surviving organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-2A-11.07(c);

(9) any additional information required by the governing statute of any constituent organization;

(10) if the plan of merger required approval by the stockholders of a corporation that is a constituent organization, a statement that the plan was duly approved by the stockholders and, if voting by any separate voting group was required, by each separate voting group, in the manner required by this chapter and the certificate of incorporation;

(11) if the plan of merger did not require approval by the stockholders of a corporation that is a constituent organization, a statement to that effect; and

(12) a statement that the plan of merger will be furnished by the surviving organization, on request and without cost, to any owner of any constituent organization which is a party to the merger.

(b) After a plan of stock exchange in which the acquired entity is a corporation has been adopted and approved as required by this chapter, a statement of stock exchange shall be signed by the acquired entity and the acquiring entity. The statement of stock exchange shall set forth:

(1) the name and mailing address of the principal office of the acquired entity, and the jurisdiction of its governing statute, and its unique identifying number or other designation as assigned by the Secretary of State, if any;

(2) the name, jurisdiction of formation, and type of entity of the corporation or foreign corporation that is the acquiring entity;

(3) a statement that the plan of stock exchange was duly approved by the acquired entity by:

(i) the required vote or consent of each class or series of stock included in the exchange; and

(ii) the required vote or consent of each other class or series of stock entitled to vote on approval of the exchange by the certificate of incorporation of the acquired entity; and

(4) if the stock exchange did not require the approval by the stockholders of a corporation that is a party to the stock exchange, a statement to that effect.

(c) In addition to the requirements of subsection (a) or subsection (b), statement of merger or stock exchange may contain any other provision not prohibited by law.

(d) The statement of merger or stock exchange shall be delivered to the Secretary of State for filing and, subject to subsection (e), the merger or stock exchange shall take effect at the effective date determined in accordance with Article 4 of Chapter 1.

(e) With respect to a merger in which one or more foreign organizations is a constituent organization or a foreign organization created by the merger is the surviving organization, the merger itself shall become effective at the later of:

(1) when all documents required to be filed in foreign jurisdictions to effect the merger have become effective, or

(2) when the statement of merger takes effect.

(f) A statement of merger filed under this section may be combined with any filing required under the governing statute governing any domestic organization involved in the transaction if the combined filing satisfies the requirements of this section, the other governing statute, and Article 4 of Chapter 1.

(g) After a merger becomes effective, if the surviving organization is a corporation, then, except for certified copies of the statement of merger permitted to be delivered to the judge of probate for filing pursuant to subsection (h), all filing instruments required to be filed under this title regarding that surviving organization shall be delivered for filing to the Secretary of State.

(h) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any filing shall evidence chain of title, but lack of filing shall not affect the surviving organization's title to real property.

§10A-2A-11.07. Effect of merger or stock exchange.

(a) When a merger becomes effective:

(1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes into existence;

(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each constituent organization that ceases to exist vests in the surviving organization without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving organization shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

(4) all debts, obligations and other liabilities of each constituent organization, other than the surviving organization, are debts, obligations and liabilities of the surviving organization, and neither the rights of creditors, nor any liens upon the property of any constituent organization, shall be impaired by the merger;

(5) an action or proceeding pending by or against any constituent organization continues as if the merger had not occurred and the name of the surviving organization may, but need not be, substituted in any pending proceeding for the name of any constituent organization whose separate existence ceased in the merger;

(6) except as prohibited by law other than this chapter or as provided in the plan of merger, all the rights, privileges, franchises, immunities, powers, and purposes of each constituent organization, other than the surviving organization, vest in the surviving organization;

(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

(8) except as otherwise agreed, if a constituent organization that is a corporation ceases to exist, the merger does not dissolve the corporation;

(9) if the surviving organization is created pursuant to the merger:

(A) if it is a corporation, the certificate of incorporation and bylaws become effective; or

(B) if it is an organization other than a corporation, the organizational documents that create the organization becomes effective;

(10) if the surviving organization existed before the merger, any amendments provided for in the statement of merger for the organizational documents of that organization become effective;

(11) the stock of each corporation or foreign corporation that is a constituent organization to the merger, and the eligible interests in an eligible entity that is a constituent organization, that are to be converted in accordance with the terms of the merger into stock or other securities, eligible interests, obligations, rights to acquire stock, other securities, or eligible interests, cash, other property, or any combination of the foregoing, are converted, and the former holders of stock or eligible interests are entitled only to the rights provided to them by those terms or to any rights they may have under Article 13 or the governing statute governing the eligible entity or foreign corporation;

(12) if the surviving organization exists before the merger:

(i) except as provided in the plan of merger, all property and contract rights of the surviving organization remain its property and contract rights without transfer, reversion, or impairment;

(ii) the surviving organization remains subject to all its debts, obligations, and other liabilities; and

(iii) except as provided by law other than this chapter or the plan of merger, the surviving organization continues to hold all of its rights, privileges, franchises, immunities, powers and purposes.

(b) When a stock exchange becomes effective, the stock in the acquired entity that is to be exchanged for stock or other securities, obligations, rights to acquire stock, other securities, cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of stock exchange or to any rights they may have under Article 13 or under the governing statute governing the acquired entity.

(c) A surviving organization that is a foreign organization:

(1) consents to the jurisdiction of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability;

(2) consents that if it fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then the service of process on that surviving organization for the purposes of enforcing a debt, obligation, or other liability under this subsection and for enforcing the rights of stockholders of each corporation that is a constituent organization who exercise appraisal rights may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35; and

(3) agrees that it will promptly pay the amount, if any, to which stockholders referred to in clause (2) of this subsection (c) are entitled under Article 13.

§10A-2A-11.08. Abandonment of a merger or stock exchange.

(a) After a plan of merger or stock exchange has been adopted and approved as required by this Article 11, and before the statement of merger or stock exchange has become effective, the plan may be abandoned by a corporation that is a party to the plan without action by its stockholders in accordance with any procedures set forth in the plan of merger or stock exchange or, if no procedures are set forth in the plan, in the manner determined by the board of directors.

(b) If a merger or stock exchange is abandoned under subsection (a) after the statement of merger or stock exchange has been delivered to the Secretary of State for filing but before the merger or stock exchange has become effective, a statement of abandonment signed by all the parties that signed the statement of merger or stock exchange shall be delivered to the Secretary of State for filing before the statement of merger or stock exchange becomes effective. The statement shall take effect on filing and the merger or stock exchange shall be deemed abandoned and shall not become effective. The statement of abandonment must contain:

(1) the name of each party to the merger or the names of the acquiring and acquired entities in a stock exchange;

(2) the date on which the statement of merger or stock exchange was filed by the Secretary of State; and

(3) a statement that the merger or stock exchange has been abandoned in accordance with this section.

§10A-2A-11.09. Nonexclusive.

This article is not exclusive. This article does not preclude a corporation from merging or exchanging its stock under law other than this chapter.

Article 12. DISPOSITION OF ASSETS.

§10A-2A-12.01. Disposition of assets not requiring stockholder approval.

No approval of the stockholders is required, unless the certificate of incorporation otherwise provides:

(a) to sell, lease, exchange, or otherwise dispose of any or all of the corporation's assets in the usual and regular course of business;

(b) to mortgage, pledge, dedicate to the repayment of indebtedness (whether with or without recourse), or otherwise encumber any or all of the corporation's assets, regardless of whether in the usual and regular course of business;

(c) to transfer any or all of the corporation's assets to one or more corporations, foreign corporations, or other entities all of the stock or interests of which are owned by the corporation; or

(d) to distribute assets pro rata to the holders of one or more classes or series of the corporation's stock.

§10A-2A-12.02. Stockholder approval of certain dispositions.

(a) A sale, lease, exchange, or other disposition of assets, other than a disposition described in Section 10A-2A-12.01, requires approval of the corporation's stockholders if the disposition would leave the corporation without a significant continuing business activity. A corporation will conclusively be deemed 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 (i) 25 percent of total assets at the end of the most recently completed fiscal year, and (ii) either 25 percent of either income from continuing operations before taxes or 25 percent of revenues from continuing operations, in each case for the most recently completed fiscal year.

(b) To obtain the approval of the stockholders under subsection (a) the board of directors shall first adopt a resolution authorizing the disposition. The disposition shall then be approved by the stockholders. In submitting the disposition to the stockholders for approval, the board of directors shall recommend that the stockholders 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 a recommendation, or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for the approval by the stockholders of a disposition or the effectiveness of the disposition.

(d) If a disposition is required to be approved by the stockholders under subsection (a), and if the approval is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders 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.

(e) Unless the certificate of incorporation or the board of directors acting pursuant to subsection (c) requires a greater vote or a greater quorum, the approval of a disposition by the stockholders shall require the approval of the stockholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the disposition.

(f) After a disposition has been approved by the stockholders under this Article 12, and at any time before the disposition has been consummated, it may be abandoned by the corporation without action by the stockholders, subject to any contractual rights of other parties to the disposition.

(g) A disposition of assets in the course of dissolution under Article 14 is not governed by this section.

(h) For purposes of this section only, the property and assets of the corporation include the property and assets of any subsidiary of the corporation. As used in this subsection, "subsidiary" means any entity wholly owned and controlled, directly or indirectly, by the corporation and includes, without limitation, corporations, partnerships, limited partnerships, limited liability partnerships, limited liability companies, and/or statutory trusts. Notwithstanding subsection (a) of this section, except to the extent the certificate of incorporation otherwise provides, no vote by stockholders shall be required for a sale, lease or exchange of property and assets of the corporation to a subsidiary.

ARTICLE 13. APPRAISAL RIGHTS.

Division A. RIGHT TO APPRAISAL AND PAYMENT FOR STOCK.

§10A-2A-13.01. Definitions.

Notwithstanding Chapter 1, in this Article 13:

(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 that person. For purposes of Section 10A-2A-13.02(b)(4), a person is deemed to be an affiliate of its senior executives.

(2) "Corporation" means the corporation that is the issuer of the stock held by a stockholder demanding appraisal and, for matters covered in Section 10A-2A-13.22 through Section 10A-2A-13.31, includes the surviving organization of a merger.

(3) "Fair value" means the value of the corporation's stock determined:

(i) immediately before the effectiveness of the corporate action to which the stockholder objects;

(ii) using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and

(iii) without discounting for lack of marketability or minority status.

(4) "Interest" means interest from the date the corporate action becomes effective until the date of payment, and shall be compounded quarterly and shall accrue at five percent over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the corporate action and the date of payment.

(5) "Interested transaction" means a corporate action described in Section 10A-2A-13.02(a), other than a merger pursuant to Section 10A-2A-11.05, involving an interested person in which any of the stock or assets of the corporation are being acquired or converted. As used in this definition:

(i) "Interested person" means a person, or an affiliate of a person, who at any time during the one-year period immediately preceding approval by the board of directors of the corporate action:

(A) was the beneficial owner of 20 percent or more of the voting power of the corporation, other than as owner of excluded stock;

(B) had the power, contractually or otherwise, other than as owner of excluded stock, to cause the appointment or election of 25 percent 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 that senior executive or director will receive, as a result of the corporate action, a financial benefit not generally available to other stockholders as such, 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 Section 10A-2A-8.60; or

(III) in the case of a director of the corporation who will, in the corporate action, become a director or governing person of the acquiror or any of its affiliates, rights and benefits as a director or governing person that are provided on the same basis as those afforded by the acquiror generally to other directors or governing persons of the acquiror or its affiliate.

(ii) "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, stock; except that a member of a national securities exchange is not deemed to be 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 stock of the corporation, each member of the group formed thereby is deemed to have acquired beneficial ownership, as of the date of the agreement, of all stock having voting power of the corporation beneficially owned by any member of the group.

(iii) "Excluded stock" means stock acquired pursuant to an offer for all stock having voting power if the offer was made within one 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.

(6) "Preferred stock" means a class or series of stock whose holders have preference over any other class or series of stock with respect to distributions.

(7) "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.

(8) "Stockholder" means a record stockholder, a beneficial stockholder, and a voting trust beneficial owner.

§10A-2A-13.02. Right to appraisal.

(a) A stockholder is entitled to appraisal rights, and to obtain payment of the fair value of that stockholder's stock, in the event of any of the following corporate actions:

(1) consummation of a merger to which the corporation is a party (i) if the corporation is a subsidiary and the merger is governed by Section 10A-2A-11.05 or (ii) if stockholder approval is required for the merger by Section 10A-2A-11.04, or would be required but for the provisions of Section 10A-2A-11.04(j), except that appraisal rights shall not be available to any stockholder of the corporation with respect to stock of any class or series that remain outstanding after consummation of the merger;

(2) consummation of a stock exchange to which the corporation is a party the stock of which will be acquired, except that appraisal rights shall not be available to any stockholder of the corporation with respect to any class or series of stock of the corporation that is notacquiredin the stock exchange;

(3) consummation of a disposition of assets pursuant to Section 10A-2A-12.02 if the stockholder is entitled to vote on the disposition, except that appraisal rights shall not be available to any stockholder of the corporation with respect to stock of any class or series if (i) under the terms of the corporate action approved by the stockholders there is to be distributed to stockholders in cash the corporation's net assets, in excess of a reasonable amount reserved to meet claims of the type described in Section 10A-2A-14.06 and Section 10A-2A-14.07, (A) within one year after the stockholders' 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;

(4) an amendment of the certificate of incorporation with respect to a class or series of stock that reduces the number of stock of a class or series owned by the stockholder to a fraction of a stock if the corporation has the obligation or right to repurchase the fractional stock so created;

(5) any other merger, stock exchange, disposition of assets or amendment to the certificate of incorporation, in each case to the extent provided by the certificate of incorporation, bylaws or a resolution of the board of directors;

(6) consummation of a conversion of a corporation to a foreign corporation pursuant to Article 9 or Article 8 of Chapter 1 if the stockholder does not receive stock in the foreign corporation resulting from the conversion that has terms as favorable to the stockholder in all material respects, and represents at least the same percentage interest of the total voting rights of the outstanding stock of the foreign corporation, as the stock held by the stockholder before the conversion;

(7) consummation of a conversion of a corporation to a nonprofit corporation pursuant to Article 9 of this chapter of Article 8 of Chapter 1; or

(8) consummation of a conversion of the corporation to an unincorporated entity pursuant to Article 9 of this chapter or Article 8 of Chapter 1.

(b) Notwithstanding subsection (a), the availability of appraisal rights under subsections (a)(1), (2), (3), (4), (6), and (8) shall be limited in accordance with the following provisions:

(1) Appraisal rights shall not be available for the holders of stock of any class or series of stock which is:

(i) a covered security under Section 18(b)(1)(A) or (B) of the Securities Act of 1933;

(ii) has at least 2,000 record stockholders; or

(iii) issued by an open end management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and which may be redeemed at the option of the holder at net asset value.

(2) The applicability of subsection (b)(1) shall be determined as of:

(i) the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the corporate action requiring appraisal rights or, in the case of an offer made pursuant to Section 10A-2A-11.04(j), the date of the offer; or

(ii) if there is no meeting of stockholders and no offer made pursuant to Section 10A-2A-11.04(j), the day before the consummation of the corporate action or effective date of the amendment of the certificate of incorporation, as applicable.

(3) Subsection (b)(1) shall not be applicable and appraisal rights shall be available pursuant to subsection (a) for the holders of any class or series of stock (i) who are required by the terms of the corporate action requiring appraisal rights to accept for their stock anything other than cash or stock of any class or any series of stock of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in subsection (b)(1) at the time the corporate action becomes effective, or (ii) in the case of the consummation of a disposition of assets pursuant to Section 10A-2A-12.02, unless the cash, stock, or proprietary interests received in the disposition are, under the terms of the corporate action approved by the stockholders, to be distributed to the stockholders, as part of a distribution to stockholders of the net assets of the corporation in excess of a reasonable amount to meet claims of the type described in Sections 10A-2A-14.06 and 10A-2A-14.07, (A) within one year after the stockholders' approval of the action, and (B) in accordance with their respective interests determined at the time of the distribution.

(4) Subsection (b)(1) shall not be applicable and appraisal rights shall be available pursuant to subsection (a) for the holders of any class or series of stock where the corporate action is an interested transaction.

(c) Notwithstanding any other provision of Section 10A-2A-13.02, the certificate of incorporation as originally filed or any amendment to the certificate of incorporation may limit or eliminate appraisal rights for any class or series of preferred stock, except that (i) no limitation or elimination shall be 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 or merger in which the converted organization or the surviving organization is not a corporation or foreign corporation and (ii) any limitation or elimination contained in an amendment to the certificate of incorporation that limits or eliminates appraisal rights for any stock that is 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 shall not apply to any corporate action that becomes effective within one year after the effective date of the amendment if that action would otherwise afford appraisal rights.

§10A-2A-13.03. Assertion of rights by nominees and beneficial stockholders.

(a) A record stockholder may assert appraisal rights as to fewer than all the shares of stock registered in the record stockholder's name but owned by a beneficial stockholder or a voting trust beneficial owner only if the record stockholder objects with respect to all shares of stock of a class or series owned by the beneficial stockholder or the voting trust beneficial owner and notifies the corporation in writing of the name and address of each beneficial stockholder or voting trust beneficial owner on whose behalf appraisal rights are being asserted. The rights of a record stockholder who asserts appraisal rights for only part of the stock held of record in the record stockholder's name under this subsection shall be determined as if the stock as to which the record stockholder objects and the record stockholder's other shares of stock were registered in the names of different record stockholders.

(b) A beneficial stockholder and a voting trust beneficial owner may assert appraisal rights as to stock of any class or series held on behalf of the stockholder only if the stockholder:

(1) submits to the corporation the record stockholder's written consent to the assertion of appraisal rights no later than the date referred to in Section 10A-2A-13.22(b)(2)(ii); and

(2) does so with respect to all stock of the class or series that is beneficially owned by the beneficial stockholder or the voting trust beneficial owner.

Division B. PROCEDURE FOR EXERCISE OF APPRAISAL RIGHTS.

§10A-2A-13.20. Notice of appraisal rights.

(a) Where any corporate action specified in Section 10A-2A-13.02(a) is to be submitted to a vote at a stockholders' meeting, the meeting notice (or where no approval of the corporate action is required pursuant to Section 10A-2A-11.04(j), the offer made pursuant to Section 10A-2A-11.04(j)), must state that the corporation has concluded that appraisal rights are, are not or may be available under this Article 13. If the corporation concludes that appraisal rights are or may be available, a copy of this Article 13 must accompany the meeting notice or offer sent to those record stockholders entitled to exercise appraisal rights.

(b) In a merger pursuant to Section 10A-2A-11.05, the parent entity shall notify in writing all record stockholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective. The notice shall be sent within 10 days after the corporate action became effective and include the materials described in Section 10A-2A-13.22.

(c) Where any corporate action specified in Section 10A-2A-13.02(a) is to be approved by written consent of the stockholders pursuant to Section 10A-2A-7.04:

(1) written notice that appraisal rights are, are not or may be available shall be sent to each record stockholder from whom a consent is solicited at the time consent of each stockholder 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 Article 13; and

(2) written notice that appraisal rights are, are not or may be available must be delivered together with the notice to nonconsenting and nonvoting stockholders required by Section 10A-2A-7.04(e) and (f), may include the materials described in Section 10A-2A-13.22 and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of this Article 13.

(d) Where corporate action described in Section 10A-2A-13.02(a) is proposed, or a merger pursuant to Section 10A-2A-11.05 is effected, the notice referred to in subsection (a) or (c), if the corporation concludes that appraisal rights are or may be available, and in subsection (b) must be accompanied by:

(1) financial statements of the corporation that issued the stock 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 the financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information; and

(2) the latest interim financial statements of the corporation, if any.

(e) The right to receive the information described in subsection (d) may be waived in writing by a stockholder before or after the corporate action.

§10A-2A-13.21. Notice of intent to demand payment and consequences of voting or consenting.

(a) If a corporate action specified in Section 10A-2A-13.02(a) is submitted to a vote at a stockholders' meeting, a stockholder who wishes to assert appraisal rights with respect to any class or series of stock:

(1) shall deliver to the corporation, before the vote is taken, written notice of the stockholder's intent to demand payment if the proposed action is effectuated; and

(2) shall not vote, or cause or permit to be voted, any stock of the class or series in favor of the proposed action.

(b) If a corporate action specified in Section 10A-2A-13.02(a) is to be approved by written consent, a stockholder who wishes to assert appraisal rights with respect to any class or series of stock shall not sign a consent in favor of the proposed action with respect to that class or series of stock.

(c) If a corporate action specified in Section 10A-2A-13.02(a) does not require stockholder approval pursuant to Section 10A-2A-11.04(j), a stockholder who wishes to assert appraisal rights with respect to any class or series of stock (i) shall deliver to the corporation before the stock is purchased pursuant to the offer written notice of the stockholder's intent to demand payment if the proposed action is effected; and (ii) shall not tender, or cause or permit to be tendered, any stock of the class or series in response to the offer.

(d) A stockholder who fails to satisfy the requirements of subsection (a), (b), or (c) is not entitled to payment under this Article 13.

§10A-2A-13.22. Appraisal notice and form.

(a) If a corporate action requiring appraisal rights under Section 10A-2A-13.02(a) becomes effective, the corporation shall deliver a written appraisal notice and form required by subsection (b) to all stockholders who satisfy the requirements of Section 10A-2A-13.21(a), (b), or (c). In the case of a merger under Section 10A-2A-11.05, the parent shall deliver an appraisal notice and form to all record stockholders who may be entitled to assert appraisal rights.

(b) The appraisal notice shall be delivered no earlier than the date the corporate action specified in Section 10A-2A-13.02(a) became effective, and no later than 10 days after that date, and must:

(1) supply a form that (i) specifies the first date of any announcement to stockholders made before the date the corporate action became effective of the principal terms of the proposed corporate action, (ii) if the announcement was made, requires the stockholder asserting appraisal rights to certify whether beneficial ownership of those shares of stock for which appraisal rights are asserted was acquired before that date, and (iii) requires the stockholder asserting appraisal rights to certify that the stockholder did not vote for or consent to the transaction as to the class or series of stock for which appraisal is sought;

(2) state:

(i) where the form shall be sent and where certificates for certificated stock shall be deposited and the date by which those certificates must be deposited, which date may not be earlier than the date by which the corporation must receive the required form under subsection (b)(2)(ii);

(ii) a date by which the corporation shall receive the form, which date may not be fewer than 40 nor more than 60 days after the date the subsection (a) appraisal notice is sent, and state that the stockholder shall have waived the right to demand appraisal with respect to the stock unless the form is received by the corporation by the specified date;

(iii) the corporation's estimate of the fair value of the stock;

(iv) that, if requested in writing, the corporation will provide, to the stockholder so requesting, within 10 days after the date specified in subsection (b)(2)(ii) the number of stockholders who return the forms by the specified date and the total number of shares of stock owned by them; and

(v) the date by which the notice to withdraw under Section 10A-2A-13.23 shall be received, which date shall be within 20 days after the date specified in subsection (b)(2)(ii); and

(3) be accompanied by a copy of this Article 13.

§10A-2A-13.23. Perfection of rights; right to withdraw.

(a) A stockholder who receives notice pursuant to Section 10A-2A-13.22 and who wishes to exercise appraisal rights shall sign and return the form sent by the corporation and, in the case of certificated stock, deposit the stockholder's certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to Section 10A-2A-13.22(b)(2)(ii). In addition, if applicable, the stockholder shall certify on the form whether the beneficial owner of the stock acquired beneficial ownership of the stock before the date required to be set forth in the notice pursuant to Section 10A-2A-13.22(b)(1)(i). If a stockholder fails to make this certification, the corporation may elect to treat the stockholder's stock as after-acquired stock under Section 10A-2A-13.25. Once a stockholder deposits the certificates or, in the case of uncertificated stock, returns the signed forms, that stockholder loses all rights as a stockholder, unless the stockholder withdraws pursuant to subsection (b).

(b) A stockholder who has complied with subsection (a) may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by so notifying the corporation in writing by the date set forth in the appraisal notice pursuant to Section 10A-2A-13.22(b)(2)(v). A stockholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the corporation's written consent.

(c) A stockholder who does not sign and return the form and, in the case of certificated stock, deposit that stockholder's stock certificates where required, each by the date set forth in the notice described in Section 10A-2A-13.22(b), shall not be entitled to payment under this Article 13.

§10A-2A-13.24. Payment.

(a) Except as provided in Section 10A-2A-13.25, within 30 days after the form required by Section 10A-2A-13.22(b)(2)(ii) is due, the corporation shall pay in cash to those stockholders who complied with Section 10A-2A-13.23(a) the amount the corporation estimates to be the fair value of their stock, plus interest.

(b) The payment to each stockholder pursuant to subsection (a) must be accompanied by:

(1)(i) financial statements of the corporation that issued the stock 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; provided that, if the annual financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information, and (ii) the latest interim financial statements of the corporation, if any;

(2) a statement of the corporation's estimate of the fair value of the stock, which estimate shall equal or exceed the corporation's estimate given pursuant to Section 10A-2A-13.22(b)(2)(iii); and

(3) a statement that stockholders described in subsection (a) have the right to demand further payment under Section 10A-2A-13.26 and that if any stockholder does not do so within the time period specified in Section 10A-2A-13.26(b), the stockholder shall be deemed to have accepted the payment under subsection (a) in full satisfaction of the corporation's obligations under this Article 13.

§10A-2A-13.25. After-acquired stock.

(a) A corporation may elect to withhold payment required by Section 10A-2A-13.24 from any stockholder who was required to, but did not certify that beneficial ownership of all of the stockholder's stock for which appraisal rights are asserted was acquired before the date set forth in the appraisal notice sent pursuant to Section 10A-2A-13.22(b)(1).

(b) If the corporation elects to withhold payment under subsection (a), it shall, within 30 days after the form required by Section 10A-2A-13.22(b)(2)(ii) is due, notify all stockholders who are described in subsection (a):

(1) of the information required by Section 10A-2A-13.24(b)(1);

(2) of the corporation's estimate of fair value pursuant to Section 10A-2A-13.24(b)(2);

(3) that they may accept the corporation's estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under Section 10A-2A-13.26;

(4) that those stockholders who wish to accept the offer shall so notify the corporation of their acceptance of the corporation's offer within 30 days after receiving the offer; and

(5) that those stockholders who do not satisfy the requirements for demanding appraisal under Section 10A-2A-13.26 shall be deemed to have accepted the corporation's offer.

(c) Within 10 days after receiving the stockholder's acceptance pursuant to subsection (b)(4), the corporation shall pay in cash the amount it offered under subsection (b)(2) plus interest to each stockholder who agreed to accept the corporation's offer in full satisfaction of the stockholder's demand.

(d) Within 40 days after delivering the notice described in subsection (b), the corporation shall pay in cash the amount it offered to pay under subsection (b)(2) plus interest to each stockholder described in subsection (b)(5).

§10A-2A-13.26. Procedure if stockholder dissatisfied with payment or offer.

(a) A stockholder paid pursuant to Section 10A-2A-13.24 who is dissatisfied with the amount of the payment shall notify the corporation in writing of that stockholder's estimate of the fair value of the stock and demand payment of that estimate (less any payment under Section 10A-2A-13.24) plus interest. A stockholder offered payment under Section 10A-2A-13.25 who is dissatisfied with that offer shall reject the offer and demand payment of the stockholder's stated estimate of the fair value of the stock plus interest.

(b) A stockholder who fails to notify the corporation in writing of that stockholder's demand to be paid the stockholder's stated estimate of the fair value plus interest under subsection (a) within 30 days after receiving the corporation's payment or offer of payment under Section 10A-2A-13.24 or Section 10A-2A-13.25, respectively, waives the right to demand payment under this section and shall be entitled only to the payment made or offered pursuant to those respective sections.

Division C. JUDICIAL APPRAISAL OF STOCK.

§10A-2A-13.30. Court action.

(a) If a stockholder makes demand for payment under Section 10A-2A-13.26 which 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 stock and accrued interest. If the corporation does not commence the proceeding within the 60-day period, it shall pay in cash to each stockholder the amount the stockholder demanded pursuant to Section 10A-2A-13.26 plus interest.

(b) The corporation shall commence the proceeding in the circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located.

(c) The corporation shall make all stockholders (regardless of whether they are residents of this state) whose demands remain unsettled parties to the proceeding as in an action against their stock, and all parties shall be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

(d) The jurisdiction of the court in which the proceeding is commenced under subsection (b) 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 shall have the powers described in the order appointing them, or in any amendment to it. The stockholders demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. There shall be no right to a jury trial.

(e) Each stockholder made a party to the proceeding is entitled to judgment (i) for the amount, if any, by which the court finds the fair value of the stockholder's stock exceeds the amount paid by the corporation to the stockholder for the stock, plus interest, or (ii) for the fair value, plus interest, of the stockholder's stock for which the corporation elected to withhold payment under Section 10A-2A-13.25.

§10A-2A-13.31. Court costs and expenses.

(a) The court in an appraisal proceeding commenced under Section 10A-2A-13.30 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 stockholders demanding appraisal, in amounts which the court finds equitable, to the extent the court finds the stockholders acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this Article 13.

(b) The court in an appraisal proceeding may also assess the expenses of the respective parties in amounts the court finds equitable:

(1) against the corporation and in favor of any or all stockholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of Section 10A-2A-13.20, Section 10A-2A-13.22, Section 10A-2A-13.24, or Section 10A-2A-13.25; or

(2) against either the corporation or a stockholder 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 Article 13.

(c) If the court in an appraisal proceeding finds that the expenses incurred by any stockholder were of substantial benefit to other stockholders similarly situated and that the expenses should not be assessed against the corporation, the court may direct that the expenses be paid out of the amounts awarded the stockholders who were benefited.

(d) To the extent the corporation fails to make a required payment pursuant to Section 10A-2A-13.24, Section 10A-2A-13.25, or Section 10A-2A-13.26, the stockholder may sue directly for the amount owed, and to the extent successful, shall be entitled to recover from the corporation all expenses of the suit.

Division D. OTHER REMEDIES.

§10A-2A-13.40. Other remedies limited.

(a) The legality of a proposed or completed corporate action described in Section 10A-2A-13.02(a) may not be contested, nor may the corporate action be enjoined, set aside or rescinded, in a legal or equitable proceeding by a stockholder after the stockholders have approved the corporate action.

(b) Subsection (a) does not apply to a corporate action that:

(1) was not authorized and approved in accordance with the applicable provisions of:

(i) Article 9, 10, 11, or 12 of this chapter or Article 8 of Chapter 1;

(ii) the certificate of incorporation or bylaws; or

(iii) the resolution of the board of directors authorizing the corporate action;

(2) 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;

(3) is an interested transaction, unless it has been recommended by the board of directors in the same manner as is provided in Section 10A-2A-8.60 and has been approved by the stockholders in the same manner as is provided in Section 10A-2A-8.60 as if the interested transaction were a director's conflicting interest transaction; or

(4) is approved by less than unanimous consent of the voting stockholders pursuant to Section 10A-2A-7.04 if:

(i) the challenge to the corporate action is brought by a stockholder 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 stockholder bringing the proceeding.

ARTICLE 14. DISSOLUTION.

Division A. VOLUNTARY DISSOLUTION.

§10A-2A-14.01. Dissolution by incorporators or initial directors.

A majority of the incorporators or initial directors of a corporation that has not issued stock or has not commenced business may dissolve the corporation by delivering to the Secretary of State for filing a certificate of dissolution that sets forth:

(a) the name of the corporation;

(b) the date of its incorporation;

(c) either (i) that none of the corporation's stock has been issued or (ii) that the corporation has not commenced business;

(d) that no debt of the corporation remains unpaid;

(e) that the net assets of the corporation remaining after winding up have been distributed to the stockholders, if stock was issued; and

(f) that a majority of the incorporators or initial directors authorized the dissolution.

§10A-2A-14.02. Dissolution by board of directors and stockholders.

(a) The board of directors may propose dissolution for submission to the stockholders by first adopting a resolution authorizing the dissolution.

(b) For a proposal to dissolve to be adopted, it shall then be approved by the stockholders. In submitting the proposal to dissolve to the stockholders for approval, the board of directors shall recommend that the stockholders approve the dissolution, unless (i) the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for the approval of the proposal for dissolution by stockholders or the effectiveness of the dissolution.

(d) If the approval of the stockholders is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders at which the dissolution is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

(e) Unless the certificate of incorporation or the board of directors acting pursuant to subsection (c) requires a greater vote, a greater quorum, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the stockholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the proposal to dissolve.

(f) Dissolution of a corporation may also be authorized without action of the directors if all the stockholders entitled to vote thereon shall consent in writing and a certificate of dissolution shall be delivered to the Secretary of State for filing pursuant to Section 10A-2A-14.03.

§10A-2A-14.03. Certificate of dissolution.

(a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing a certificate of dissolution setting forth:

(1) the name of the corporation;

(2) the date that dissolution was authorized; and

(3) if dissolution was approved by the stockholders, a statement that the proposal to dissolve was duly approved by the stockholders in the manner required by this chapter and by the certificate of incorporation.

(b) The certificate of dissolution shall take effect at the effective date determined in accordance with Article 4 of Chapter 1. A corporation is dissolved upon the effective date of its certificate of dissolution.

(c) For purposes of this Division A of this Article 14, "dissolved corporation" means a corporation whose certificate of dissolution has become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation.

§10A-2A-14.04. Revocation of dissolution; reinstatement.

(a) A corporation may revoke its dissolution within 120 days after its effective date and be reinstated.

(b) Revocation of dissolution and reinstatement shall be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation and reinstatement by action of the board of directors alone, in which event the board of directors may revoke the dissolution and effect the reinstatement without stockholder action.

(c) After the revocation of dissolution and reinstatement is authorized, the corporation may revoke the dissolution and effect the reinstatement by delivering to the Secretary of State for filing a certificate of revocation of dissolution and reinstatement, together with a copy of its certificate of dissolution, that sets forth:

(1) the name of the corporation;

(2) the effective date of the dissolution that was revoked;

(3) the date that the revocation of dissolution and reinstatement was authorized;

(4) if the corporation's board of directors (or incorporators) revoked the dissolution and effected the reinstatement, a statement to that effect;

(5) if the corporation's board of directors revoked a dissolution and effected the reinstatement as authorized by the stockholders, a statement that revocation and reinstatement was permitted by action by the board of directors alone pursuant to that authorization; and

(6) if stockholder action was required to revoke the dissolution and effect the reinstatement, a statement that the revocation and reinstatement was duly approved by the stockholders in the manner required by this chapter and by the certificate of incorporation.

(d) The certificate of revocation of dissolution and reinstatement shall take effect at the effective date determined in accordance with Article 4 of Chapter 1. Revocation of dissolution and reinstatement is effective upon the effective date of the certificate of revocation of dissolution and reinstatement.

(e)(1) Subject to subsection (2), upon revocation and reinstatement, the corporation shall be deemed for all purposes to have continued its business as if dissolution had never occurred; and each right inuring to, and each debt, obligation, and liability incurred by, the corporation after the dissolution shall be determined as if the dissolution had never occurred.

(2) The rights of persons acting in reliance on the dissolution before those persons had notice of the revocation and reinstatement shall not be adversely affected by the revocation and reinstatement.

(f) If the corporation is listed in the Secretary of State's records as a corporation that has been dissolved, then the name of the corporation following revocation and reinstatement shall be that corporation name at the time of revocation and reinstatement if that corporation name complies with Article 5 of Chapter 1 at the time of revocation and reinstatement. If that corporation name does not comply with Article 5 of Chapter 1, the name of the corporation following revocation and reinstatement shall be that corporation name followed by the word "reinstated."

§10A-2A-14.05. Effect of dissolution.

(a) A dissolved corporation continues its existence as a corporation but may not carry on any business except as is appropriate to wind up and liquidate its business and affairs, including:

(1) collecting its assets;

(2) disposing of its properties that will not be distributed in kind to stockholders;

(3) discharging or making provisions for discharging its liabilities;

(4) distributing its remaining property among its stockholders according to their interests; and

(5) doing every other act necessary to wind up and liquidate its business and affairs.

(b) In winding up its business and affairs, a corporation may:

(1) preserve the corporation's business and affairs and property as a going concern for a reasonable time;

(2) prosecute, defend, or settle actions or proceedings whether civil, criminal, or administrative;

(3) transfer the corporation's assets;

(4) resolve disputes by mediation or arbitration;

(5) merge or convert in accordance with Article 9 or 11 of this chapter or Article 8 of Chapter 1; and

(6) enter into a stock exchange in accordance with Article 11 of this chapter.

(c) Dissolution of a corporation does not:

(1) transfer title to the corporation's property;

(2) prevent transfer of its stock or securities;

(3) subject its directors or officers to standards of conduct different from those prescribed in Article 8;

(4) change (i) quorum or voting requirements for its board of directors or stockholders;

(ii) provisions for selection, resignation, or removal of its directors or officers or both; or

(iii) provisions for amending its bylaws;

(5) prevent commencement of a proceeding by or against the corporation in its corporate name;

(6) abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or

(7) terminate the authority of the registered agent of the corporation.

(d) A distribution in liquidation under this section may only be made by a dissolved corporation. For purposes of determining the stockholders entitled to receive a distribution in liquidation, the board of directors may fix a record date for determining stockholders entitled to a distribution in liquidation, which date may not be retroactive. If the board of directors does not fix a record date for determining stockholders entitled to a distribution in liquidation, the record date is the date the board of directors authorizes the distribution in liquidation.

§10A-2A-14.06. Known claims against dissolved corporation.

(a) A dissolved corporation may dispose of any known claims against it by following the procedures described in subsection (b) at any time after the effective date of the dissolution of the corporation.

(b) A dissolved corporation may give written notice of the dissolution to the holder of any known claim. The notice must:

(1) identify the dissolved corporation;

(2) describe the information required to be included in a claim;

(3) provide a mailing address to which the claim is to be sent;

(4) state the deadline, which may not be fewer than 120 days from the effective date of the notice, by which the dissolved corporation must receive the claim; and

(5) state that if not sooner barred, the claim will be barred if not received by the deadline.

(c) Unless sooner barred by any other statute limiting actions, a claim against a dissolved corporation is barred:

(1) if a claimant who was given notice under subsection (b) does not deliver the claim to the dissolved corporation by the deadline; or

(2) if a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within 90 days from the effective date of the rejection notice.

(d) For purposes of this section, "known claim" or "claim" includes unliquidated claims, but does not include a contingent liability that has not matured so that there is no immediate right to bring suit or a claim based on an event occurring after the effective date of dissolution.

(e) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations.

§10A-2A-14.07. Other claims against dissolved corporation.

(a) A dissolved corporation may publish notice of its dissolution and request that persons with claims against the dissolved corporation present them in accordance with the notice.

(b) The notice authorized by subsection (a) must:

(1) be published at least one time in a newspaper of general circulation in the county in which the dissolved corporation's principal office is located or, if it has none in this state, in the county in which the corporation's registered office is or was last located;

(2) describe the information that must be included in a claim and provide a mailing address to which the claim is to be sent; and

(3) state that if not sooner barred, a claim against the dissolved corporation will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice.

(c) If a dissolved corporation publishes a newspaper notice in accordance with subsection (b), unless sooner barred by any other statute limiting actions, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the publication date of the newspaper notice:

(1) a claimant who was not given notice under Section 10A-2A-14.06;

(2) a claimant whose claim was timely sent to the dissolved corporation but not acted on by the dissolved corporation; and

(3) a claimant whose claim is contingent at the effective date of the dissolution of the corporation, or is based on an event occurring after the effective date of the dissolution of the corporation.

(d) A claim that is not barred under this section, any other statute limiting actions, or Section 10A-2A-14.06 may be enforced:

(1) against a dissolved corporation, to the extent of its undistributed assets; and

(2) except as provided in subsection (h), if the assets of a dissolved corporation have been distributed after dissolution, against each stockholder to the extent of the stockholder's proportionate share of the claim or of the assets distributed to that stockholder after dissolution, whichever is less, but a stockholder's total liability for all claims under subsection (d) may not exceed the total amount of assets distributed to that stockholder after dissolution of the corporation.

(e) A dissolved corporation that published a notice under this section may file an application with the circuit court in the county in which the dissolved corporation's principal place of business is located and if the corporation does not have a principal place of business within this state, in the county in which the dissolved corporation's most recent registered office is located, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved corporation or that are based on an event occurring after the effective date of the dissolution of the corporation but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of the dissolution of the corporation. Provision need not be made for any claim that is or is reasonably anticipated to be barred under subsection (c).

(f) Within 10 days after the filing of the application provided for in subsection (e), notice of the proceeding shall be given by the dissolved corporation to each potential claimant as described in subsection (e).

(g) The circuit court under subsection (e) may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the dissolved corporation.

(h) Provision by the dissolved corporation for security in the amount and the form ordered by the circuit court under subsection (e) shall satisfy the dissolved corporation's obligation with respect to claims that are contingent, have not been made known to the dissolved corporation, or are based on an event occurring after the effective date of the dissolution of the corporation, and those claims may not be enforced against a stockholder to whom assets have been distributed by the dissolved corporation after the effective date of the dissolution of the corporation.

(i) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations.

(j) If a claim has been satisfied, disposed of, or barred under Section 10A-2A-14.06, this section, or other law, the person or persons designated to wind up the affairs of a corporation, and the stockholders receiving assets from the dissolved corporation, shall not be liable for that claim.

§10A-2A-14.08. Director duties.

(a) Directors shall cause the dissolved corporation to discharge or make reasonable provision for the payment of claims and make distributions in liquidation of assets to stockholders after payment or provision for claims.

(b) Directors of a dissolved corporation which has disposed of claims under Section 10A-2A-14.06 or Section 10A-2A-14.07 shall not be liable for breach of Section 10A-2A-14.08(a) with respect to claims against the dissolved corporation that are barred or satisfied under Section 10A-2A-14.06 or Section 10A-2A-14.07.

Division B. JUDICIAL DISSOLUTION.

§10A-2A-14.10. Grounds for judicial dissolution.

(a) The circuit court of the county where the corporation's principal office, or if none in this state, its registered office, is located may dissolve a corporation:

(1) in a proceeding by the Attorney General if it is established that:

(i) the corporation obtained its certificate of incorporation through fraud; or

(ii) the corporation has continued to exceed or abuse the authority conferred upon it by law;

(2) in a proceeding by a stockholder if it is established that:

(i) the directors are deadlocked in the management of the corporate affairs, the stockholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the stockholders generally, because of the deadlock;

(ii) the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;

(iii) the stockholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; or

(iv) the corporate assets are being misapplied or wasted;

(3) in a proceeding by a creditor if it is established that:

(i) the creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or

(ii) the corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent;

(4) in a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or

(5) in a proceeding by a stockholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and dissolve.

(b) Subsection (a)(2) shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has a class or series of stock which is:

(1) a covered security under Section 18(b)(1)(A) or (B) of the Securities Act of 1933; or

(2) not a covered security, but is held by at least 2,000 stockholders.

(c) In subsection (a), "stockholder" means a record stockholder, a beneficial stockholder, and an unrestricted voting trust beneficial owner, and in subsection (b), "stockholder" means a record stockholder, a beneficial stockholder, and a voting trust beneficial owner.

§10A-2A-14.11. Procedure for judicial dissolution.

(a) Venue for a proceeding by the attorney general to dissolve a corporation lies in circuit court of the county where the corporation's principal office, or if none in this state, its registered office, is located. Venue for a proceeding brought by any other party named in Section 10A-2A-14.10(a) lies in circuit court of the county where the corporation's principal office, or if none in this state, its registered office, is located.

(b) It is not necessary to make stockholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually.

(c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian during the proceeding with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.

(d) Within 10 days of the commencement of a proceeding to dissolve a corporation under Section 10A-2A-14.10(a)(2), the corporation shall deliver to all stockholders, other than the petitioner, a notice stating that the stockholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner's stock under Section 10A-2A-14.14 and accompanied by a copy of Section 10A-2A-14.14.

§10A-2A-14.12. Receivership or custodianship.

(a) Unless an election to purchase has been filed under Section 10A-2A-14.14, a court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has jurisdiction over the corporation and all of its property wherever located.

(b) The court may appoint an individual, corporation, foreign corporation, or eligible entity as a receiver or custodian, which, if a foreign corporation or foreign eligible entity, must be registered to do business in this state. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.

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

(1) the receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale; and (ii) may sue and defend in the receiver's own name as receiver of the corporation in all courts of this state;

(2) the 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 affairs of the corporation in the best interests of its stockholders and creditors. The receiver or custodian shall have such other powers and duties as the court may provide in the appointing order, which may be amended from time to time.

(d) The court during a receivership may redesignate the receiver a custodian and during a custodianship may redesignate the custodian a receiver.

(e) The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian from the assets of the corporation or proceeds from the sale of the assets.

§10A-2A-14.13. Decree of dissolution.

(a) If after a hearing the court determines that one or more grounds for judicial dissolution described in Section 10A-2A-14.10 exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State for filing.

(b) After entering the decree of dissolution, the court shall direct the winding-up and liquidation of the corporation's business and affairs in accordance with Section 10A-2A-14.05 and the notification of claimants in accordance with Sections 10A-2A-14.06 and 10A-2A-14.07.

§10A-2A-14.14. Election to purchase in lieu of dissolution.

(a) In a proceeding under Section 10A-2A-14.10(a)(2) to dissolve a corporation, the corporation may elect or, if it fails to elect, one or more stockholders may elect to purchase all stock owned by the petitioning stockholder at the fair value of the stock. An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.

(b) An election to purchase pursuant to this section may be filed with the court at any time within 90 days after the filing of the petition under Section 10A-2A-14.10(a)(2) or at a later time as the court in its discretion may allow. If the election to purchase is filed by one or more stockholders, the corporation shall, within 10 days thereafter, give written notice to all stockholders, other than the petitioner. The notice must state the name and number of shares of stock owned by the petitioner and the name and number of shares of stock owned by each electing stockholder and must advise the recipients of their right to join in the election to purchase stock in accordance with this section. Stockholders who wish to participate shall file notice of their intention to join in the purchase no later than 30 days after the effectiveness of the notice to them. All stockholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of stock as of the date the first election was filed, unless they otherwise agree or the court otherwise directs. After an election has been filed by the corporation or one or more stockholders, the proceeding under Section 10A-2A-14.10(a)(2) may not be discontinued or settled, nor may the petitioning stockholder sell or otherwise dispose of his or her stock, unless the court determines that it would be equitable to the corporation and the stockholders, other than the petitioner, to permit the discontinuance, settlement, sale, or other disposition.

(c) If, within 60 days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner's stock, the court shall enter an order directing the purchase of the petitioner's stock upon the terms and conditions agreed to by the parties.

(d) If the parties are unable to reach an agreement as provided for in subsection (c), the court, upon application of any party, shall stay the proceedings under Section 10A-2A-14.10(a)(2) and determine the fair value of the petitioner's stock as of the day before the date on which the petition under Section 10A-2A-14.10(a)(2) was filed or as of any other date as the court deems appropriate under the circumstances.

(e) Upon determining the fair value of the stock, the court shall enter an order directing the purchase upon terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional expenses as may have been awarded, and, if the stock is to be purchased by stockholders, the allocation of stock among them. In allocating the petitioner's stock among holders of different classes or series of stock, the court should attempt to preserve the existing distribution of voting rights among holders of different classes or series insofar as practicable and may direct that holders of a specific class or classes or series shall not participate in the purchase. Interest may be allowed at the rate and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning stockholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed. If the court finds that the petitioning stockholder had probable grounds for relief under Section 10A-2A-14.10(a)(2)(ii) or (iv), it may award expenses to the petitioning stockholder.

(f) Upon entry of an order under subsection (c) or (e), the court shall dismiss the petition to dissolve the corporation under Section 10A-2A-14.10(a)(2), and the petitioning stockholder shall no longer have any rights or status as a stockholder of the corporation, except the right to receive the amounts awarded by the order of the court which shall be enforceable in the same manner as any other judgment.

(g) The purchase ordered pursuant to subsection (e) shall be made within 10 days after the date the order becomes final.

(h) Any payment by the corporation pursuant to an order under subsections (c) or (e), other than an award of expenses pursuant to subsection (e), is subject to the provisions of Section 10A-2A-6.40.

Division C. MISCELLANEOUS.

§10A-2A-14.20. Deposit with State Treasurer.

Assets of a dissolved corporation that should be transferred to a creditor, claimant, or stockholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the State Treasurer or other appropriate state official for safekeeping. When the creditor, claimant, or stockholder furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer or other appropriate state official shall pay that person or his or her representative that amount.

ARTICLE 15.

Division A. GOVERNING LAW.

§10A-2A-15.01. Governing law.

(a) The law of the jurisdiction of formation of a foreign corporation governs:

(1) the incorporation and internal affairs of the foreign corporation;

(2) the liability of its stockholders as stockholders for the debts, obligations, or other liabilities of the foreign corporation; and

(3) the authority of the directors and officers of the foreign corporation.

(b) A foreign corporation is not precluded from registering to do business in this state because of any difference between the law of the foreign corporation's jurisdiction of formation and the law of this state.

Division B. ACTING IN A FIDUCIARY CAPACITY.

§10A-2A-15.10. Definitions.

The term "foreign corporation," as used in this division, shall mean:

(1) Any bank or other corporation now or hereafter organized or existing under the laws of any state of the United States other than this state; and

(2) Any national banking association or other corporation organized under the laws of the United States having its principal place of business in any state of the United States other than this state.

§10A-2-15.11. Authority of foreign corporation to act as fiduciary.

(a) Any foreign corporation may act in this state as trustee, personal representative, executor, administrator of any kind, guardian, conservator, or in any other like or similar fiduciary capacity, whether the appointment is by law, will, deed, inter vivos trust, mortgage, deed of trust, court order or otherwise, without the necessity of complying with any law of this state relating to the qualification of foreign corporations to do business in this state or the licensing of foreign corporations to do business in this state and notwithstanding any prohibition, limitation, or restriction contained in any law of this state subject to the following conditions:

(1) The foreign corporation is authorized to act in a fiduciary capacity, or capacities, in the state in which it is incorporated or, if the foreign corporation is a national banking association or other corporation organized under the laws of the United States, in the state in which it has its principal place of business.

(2) Any bank or other corporation organized under the laws of this state or a national banking association or other corporation organized under the laws of the United States having its principal place of business in this state which is authorized to act in a fiduciary capacity in this state is authorized to act in a like fiduciary capacity in the other state without the necessity of complying with any law of the other state relating to the qualification of a foreign corporation to do business in the other state.

(b) Nothing contained in this division shall be construed to prohibit or make unlawful any activity in this state by a bank or other corporation which is not incorporated under the laws of this state, or, if a national bank or other corporation organized under the laws of the United States, which does not have its principal place of business in this state which would be lawful in the absence of this division.

§10A-2A-15.12. Filing of verified statement with Commissioner of Revenue by foreign corporation prior to acting as fiduciary.

Prior to the time when any foreign corporation acts pursuant to the authority of this article in any fiduciary capacity or capacities in this state, the foreign corporation shall file with the Commissioner of Revenue of this state a verified statement which shall state:

(1) The correct corporate name of the foreign corporation;

(2) The name of the state under the laws of which it is incorporated or if the foreign corporation is a national banking association or other corporation organized under the laws of the United States shall state that fact;

(3) The address of its principal business office;

(4) In what fiduciary capacity, or capacities, it desires to act in the State of Alabama;

(5) That it is authorized to act in a similar fiduciary capacity or capacities in the state in which it is incorporated or, if it is a national banking association or other corporation organized under the laws of the United States, in which it has its principal place of business; and

(6) The statement shall irrevocably appoint the Commissioner of Revenue of Alabama as its true and lawful attorney to receive service of process in any action or proceeding against it relating to or growing out of any trust, estate or matter in respect of which the foreign corporation may act in this state in any fiduciary capacity. The statement shall be verified by an officer of the foreign corporation, and there shall be filed with it the certificates of public officials and copies of documents certified by public officials as may be necessary to show that the foreign corporation is authorized to act in a fiduciary capacity or capacities similar to those in which it desires to act in this state, in the state in which it is incorporated, or, if it is a national banking association or other corporation organized under the laws of the United States, in which it has its principal place of business.

§10A-2-15.13. Foreign corporation acting as fiduciary not deemed doing business in this state.

A foreign corporation, insofar as it acts in a fiduciary capacity in this state pursuant to the provisions of this division, shall not be deemed to be transacting business in this state, but no foreign corporation acting in a fiduciary capacity in this state pursuant to the provisions of this division without registering to transact business in this state pursuant to this title or other applicable provisions of law shall establish or maintain in this state a place of business, branch office, or agency for the conduct of business as a fiduciary. Nothing contained in this division shall diminish the authority of out-of-state banks and trust companies to establish or acquire and maintain trust offices or representative trust offices, or both, under the provisions of Chapter 11A of Title 5.

§10A-2-15.14. Foreign corporation previously acting in fiduciary capacity in state.

The provisions of this division shall not prohibit any foreign corporation authorized to act in a fiduciary capacity or capacities in the state in which it is incorporated or any national banking association or other corporation organized under the laws of the United States authorized to act in a fiduciary capacity or capacities in its principal place of business which, prior to April 14, 1956, or in the case of a corporation other than a national banking association, prior to January 1, 1995, was acting or appointed to act in this state in a particular fiduciary capacity or capacities, from continuing in the performance of the fiduciary activity or activities without complying with the provisions of this division.

§10A-2-15.15. Service of process on foreign corporation acting in fiduciary capacity.

Every foreign corporation acting in a fiduciary capacity in this state pursuant to the terms of this division shall be deemed to consent to service of all legal process in any action or proceeding against it and to service of any notice or demand permitted or required by law relating to or growing out of any trust, estate or matter in respect of which the foreign corporation shall have acted in this state in any fiduciary capacity pursuant to any means of service of process provided in Section 10A-1-5.31, Section 10A-1-5.35, or Section 10A-1-5.36.

ARTICLE 16. RECORDS AND REPORTS.

Division A. RECORDS.

§10A-2A-16.01. Corporate records.

(a) A corporation shall maintain the following records:

(1) its certificate of incorporation as currently in effect;

(2) any notices to stockholders referred to in Section 10A-2A-1.20(c)(5) specifying facts on which a filed document is dependent if those facts are not included in the certificate of incorporation or otherwise available as specified in Section 10A-2A-1.20(c)(5);

(3) its bylaws as currently in effect;

(4) all written communications within the past three years to stockholders generally;

(5) minutes of all meetings of, and records of all actions taken without a meeting by, its stockholders, its board of directors, and board committees established under Section 10A-2A-8.25;

(6) a list of the names and business addresses of its current directors and officers; and

(7) its most recent annual report delivered to the Secretary of State under Section 10A-2A-16.11.

(b) A corporation shall maintain all annual financial statements prepared for the corporation for its last three fiscal years (or any shorter period of existence) and any audit or other reports with respect to those financial statements.

(c) A corporation shall maintain accounting records in a form that permits preparation of its financial statements.

(d) A corporation shall maintain a record of its current stockholders in alphabetical order by class or series of stock showing the address of, and the number and class or series of stock held by, each stockholder. Nothing contained in this subsection shall require the corporation to include in that record the electronic mail address or other electronic contact information of a stockholder.

(e) A corporation shall maintain the records specified in this section in a manner so that they may be made available for inspection within a reasonable time.

§10A-2A-16.02. Inspection rights of stockholders.

(a) A stockholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in Section 10A-2A-16.01(a), excluding minutes of meetings of, and records of actions taken without a meeting by, the corporation's board of directors and board committees established under Section 10A-2A-8.25, if the stockholder gives the corporation a signed written notice of the stockholder's demand at least five business days before the date on which the stockholder wishes to inspect and copy.

(b) A stockholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the stockholder meets the requirements of subsection (c) and gives the corporation a signed written notice of the stockholder's demand at least five business days before the date on which the stockholder wishes to inspect and copy:

(1) the financial statements of the corporation maintained in accordance with Section 10A-2A-16.01(b);

(2) accounting records of the corporation;

(3) excerpts from minutes of any meeting of, or records of any actions taken without a meeting by, the corporation's board of directors and board committees maintained in accordance with Section 10A-2A-16.01(a); and

(4) the record of stockholders maintained in accordance with Section 10A-2A-16.01(d).

(c) A stockholder may inspect and copy the records described in subsection (b) only if:

(1) the stockholder's demand is made in good faith and for a proper purpose;

(2) the stockholder's demand describes with reasonable particularity the stockholder's purpose and the records the stockholder desires to inspect; and

(3) the records are directly connected with the stockholder's purpose.

(d)(1) The corporation may impose reasonable restrictions and conditions on access to and use of the records to be inspected and copied under subsections (a) and (b), including designating information confidential and imposing nondisclosure and safeguarding, and may further keep confidential from its stockholders and other persons, for a period of time as the corporation deems reasonable any information that the corporation reasonably believes to be in the nature of a trade secret or other information the disclosure of which the corporation in good faith believes is not in the best interest of the corporation or could damage the corporation or its business or affairs, or that the corporation is required by law or by agreement with a third party to keep confidential. In any dispute concerning the reasonableness of a restriction under this subsection, the corporation has the burden of proving reasonableness.

(2) If a stockholder is entitled to inspect and copy the records described in subsection (a) or having met the requirements of subsection (c) is entitled to inspect and copy the records described in subsection (b), and an officer of the corporation with the authority to bind the corporation who, or a corporation which, without reasonable cause, refuses to allow that stockholder to inspect and copy those records shall be liable to that stockholder for a penalty of an amount not to exceed 10 percent of the value of the shares of stock owned by that stockholder, in addition to any other damages or remedy afforded that stockholder by law. It shall be a defense to an action brought to collect the penalty specified in this section that the stockholder suing therefor has previously sold or offered for sale any list of stockholders of the corporation, or any other corporation or knowingly has aided or abetted any person in procuring any list of stockholders, or improperly has used any information secured through any prior inspection of those records of the corporation, or was not acting in good faith or for a proper purpose in making this demand.

(e) For any meeting of stockholders for which the record date for determining stockholders entitled to vote at the meeting is different than the record date for notice of the meeting, any person who becomes a stockholder subsequent to the record date for notice of the meeting and is entitled to vote at the meeting is entitled to obtain from the corporation upon request the notice and any other information provided by the corporation to stockholders in connection with the meeting, unless the corporation has made that information generally available to stockholders by posting it on its website or by other generally recognized means. Failure of a corporation to provide that information does not affect the validity of action taken at the meeting.

(f) The right of inspection granted by this section may not be abolished or limited by a corporation's certificate of incorporation or bylaws, but the right of inspection granted by this section may be limited to the extent permitted under Section 10A-2A-7.32.

(g) This section does not affect:

(1) the right of a stockholder to inspect records under Section 10A-2A-7.20 or, if the stockholder is in litigation with the corporation, to the same extent as any other litigant; or

(2) the power of a court, independently of this chapter, to compel the production of corporate records for examination and to impose reasonable restrictions as provided in Section 10A-2A-16.04(c), provided that, in the case of production of records described in subsection (b) of this section at the request of a stockholder, the stockholder has met the requirements of subsection (c).

(h) For purposes of this section, "stockholder" means a record stockholder, a beneficial stockholder, and an unrestricted voting trust beneficial owner.

§10A-2A-16.03. Scope of inspection right.

(a) A stockholder may appoint an agent or attorney to exercise the stockholder's inspection and copying rights under Section 10A-2A-16.02.

(b) The corporation may, if reasonable, satisfy the right of a stockholder to copy records under Section 10A-2A-16.02 by furnishing to the stockholder copies by photocopy or other means chosen by the corporation, including furnishing copies through an electronic transmission.

(c) The corporation may comply at its expense with a stockholder's demand to inspect the record of stockholders under Section 10A-2A-16.02(b)(4) by providing the stockholder with a list of stockholders that was compiled no earlier than the date of the stockholder's demand.

(d) The corporation may impose a reasonable charge to cover the costs of providing copies of documents to the stockholder, which may be based on an estimate of those costs.

§10A-2A-16.04. Court-ordered inspection.

(a) If a corporation does not allow a stockholder who complies with Section 10A-2A-16.02(a) to inspect and copy any records required by that section to be available for inspection, the circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the stockholder.

(b) If a corporation does not within a reasonable time allow a stockholder who complies with Section 10A-2A-16.02(b) to inspect and copy the records required by that section, the stockholder who complies with Section 10A-2A-16.02(c) may apply to the circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

(c) If the court orders inspection and copying of the records demanded under Section 10A-2A-16.02(b), it may impose reasonable restrictions on their confidentiality, use or distribution by the demanding stockholder and it shall also order the corporation to pay the stockholder's expenses incurred to obtain the order unless the corporation establishes that it refused inspection in good faith because the corporation had:

(1) a reasonable basis for doubt about the right of the stockholder to inspect the records demanded; or

(2) required reasonable restrictions on the confidentiality, use or distribution of the records demanded to which the demanding stockholder had been unwilling to agree.

§10A-2A-16.05. Inspection rights of directors.

(a) A director of a corporation is entitled to inspect and copy the books, records and documents of the corporation at any reasonable time to the extent reasonably related to the performance of the director's duties as a director, including duties as a member of a board committee, but not for any other purpose or in any manner that would violate any duty to the corporation.

(b) The circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located may order inspection and copying of the books, records and documents at the corporation's expense, upon application of a director who has been refused inspection rights, unless the corporation establishes that the director is not entitled to inspection rights. The court shall dispose of an application under this subsection on an expedited basis.

(c) If an order is issued, the court may include provisions protecting the corporation from undue burden or expense, and prohibiting the director from using information obtained upon exercise of the inspection rights in a manner that would violate a duty to the corporation, and may also order the corporation to reimburse the director for the director's expenses incurred in connection with the application.

Division B. REPORTS.

§10A-2A-16.10. Financial statements for stockholders.

(a) Upon the written request of a stockholder, a corporation shall deliver or make available to the requesting stockholder by posting on its website or by other generally recognized means annual financial statements for the most recent fiscal year of the corporation for which annual financial statements have been prepared for the corporation. If financial statements have been prepared for the corporation on the basis of generally accepted accounting principles for that specified period, the corporation shall deliver or make available those financial statements to the requesting stockholder. If the annual financial statements to be delivered or made available to the requesting stockholder are audited or otherwise reported upon by a public accountant, the report shall also be delivered or made available to the requesting stockholder.

(b) A corporation shall deliver, or make available and provide written notice of availability of, the financial statements required under subsection (a) to the requesting stockholder within five business days of delivery of the written request to the corporation.

(c) A corporation may fulfill its responsibilities under this section by delivering the specified financial statements, or otherwise making them available, in any manner permitted by the applicable rules and regulations of the United States Securities and Exchange Commission.

(d) Notwithstanding the provisions of subsections (a), (b), and (c) of this section:

(1) as a condition to delivering or making available financial statements to a requesting stockholder, the corporation may require the requesting stockholder to agree to reasonable restrictions on the confidentiality, use and distribution of the financial statements; and

(2) the corporation may, if it reasonably determines that the stockholder's request is not made in good faith or for a proper purpose, decline to deliver or make available the financial statements to that stockholder.

(e) If a corporation does not respond to a stockholder's request for annual financial statements pursuant to this section in accordance with subsection (b) within five business days of delivery of the request to the corporation:

(1) The requesting stockholder may apply to the circuit court of the county where the corporation's principal office, or, if none in this state, its registered office, is located for an order requiring delivery of or access to the requested financial statements. The court shall dispose of an application under this subsection on an expedited basis.

(2) If the court orders delivery or access to the requested financial statements, it may impose reasonable restrictions on their confidentiality, use or distribution.

(3) In the proceeding, if the corporation has declined to deliver or make available the financial statements because the stockholder had been unwilling to agree to restrictions proposed by the corporation on the confidentiality, use and distribution of the financial statements, the corporation shall have the burden of demonstrating that the restrictions proposed by the corporation were reasonable.

(4) In the proceeding, if the corporation has declined to deliver or make available the financial statements pursuant to Section 10A-2A-16.10(d)(2), the corporation shall have the burden of demonstrating that it had reasonably determined that the stockholder's request was not made in good faith or for a proper purpose.

(5) If the court orders delivery or access to the requested financial statements it shall order the corporation to pay the stockholder's expenses incurred to obtain the order unless the corporation establishes that it had refused delivery or access to the requested financial statements because the stockholder had refused to agree to reasonable restrictions on the confidentiality, use or distribution of the financial statements or that the corporation had reasonably determined that the stockholder's request was not made in good faith or for a proper purpose.

§10A-2A-16.11. Annual report for Secretary of State.

(a) Each corporation, and each foreign corporation authorized to transact business in this state, shall deliver to the Secretary of State for filing an annual report that sets forth:

(1) The name of the corporation and the state or other jurisdiction under whose law it is incorporated;

(2) The address of its registered office and the name of its registered agent at that office in this state;

(3) The address of its principal office including, in the case of a foreign corporation, the address of its principal office in the state or other jurisdiction under whose law it is incorporated;

(4) The names and respective addresses of its president and secretary; and

(5) A brief statement of the character of business in which it is actually engaged in this state.

(b) Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.

(c) The first annual report must be delivered to the Secretary of State between January 1 and March 15 of the year following the calendar year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business. Subsequent annual reports must be delivered to the Secretary of State between January 1 and March 15 of the following calendar years.

(d) If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.

(e) The public record information filed with the Department of Revenue, pursuant to Chapter 14A of Title 40, shall constitute and be accepted in lieu of the annual report required pursuant to this section, provided that a ten dollar ($10) fee for the State of Alabama accompany the public record information filed by the corporation annually with the Department of Revenue. The fee for the annual report shall be deposited in the State Treasury to the credit of the Secretary of State Entity Fund as prescribed by Section 10A-1-4.31.

ARTICLE 17. TRANSITION PROVISIONS.

§10A-2A-17.01. Application to existing corporations.

(a) Before January 1, 2021, this chapter governs only:

(1) a corporation incorporated on or after January 1, 2020; and

(2) a corporation incorporated before January 1, 2020, which elects, by amending or restating that corporation's certificate of incorporation, to be governed by this chapter.

(b) On and after January 1, 2021, this chapter governs all existing corporations incorporated under:

(1) any general or special law of this state providing for the incorporation of corporations for a purpose or purposes for which a corporation might be incorporated under this chapter, where the power has been reserved to amend, repeal, or modify the law under which the corporation was incorporated; and

(2) any predecessor statute hereto.

(c) For purposes of applying this chapter to a corporation incorporated before January 1, 2020:

(1) the corporation's incorporation document, whether a certificate of incorporation, certificate of formation, charter, or articles of incorporation is deemed to be the corporation's certificate of incorporation;

(2) the corporation's bylaws are deemed to be the corporation's bylaws;

(3) any amendment or restatement of a corporation's certificate of incorporation or bylaws on or after January 1, 2020, shall conform with this chapter; and

(4) all filing instruments to be delivered for filing by or on behalf of a corporation on or after January 1, 2020, shall conform with this chapter and shall be delivered for filing to the filing officer in accordance with Article 4 of Chapter 1.

(d) No corporation may be incorporated after December 31, 2019, pursuant to Sections 10A-2-1.01 to 10A-2-17.02, inclusive, of the Code of Alabama 1975.

§10A-2A-17.02. Application to existing foreign corporations.

A foreign corporation registered or authorized to transact business in this state on the effective date of this chapter is subject to this chapter and is deemed to be registered to transact business in this state, and is not required to renew its registration to transact business under Article 7 of Chapter 1, except as Article 7 of Chapter 1 requires.

§10A-2A-17.03. Saving provisions.

(a) Except as provided in subsection (b), the repeal of a statute by this chapter does not affect:

(1) the operation of the statute or any action taken under it before its repeal;

(2) any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;

(3) any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal; or

(4) any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed.

(b) If a penalty or punishment imposed for violation of a statute repealed by this chapter is reduced by this chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this chapter.

§10A-2A-17.04. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

§10A-2A-17.05. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).

§10A-2A-17.06. Interstate application.

A corporation formed and existing under this chapter may conduct its business and affairs, carry on its operations, and have and exercise the powers granted by this chapter in any state, foreign country, or other jurisdiction.

Section 2. Sections 10A-1-1.02, 10A-1-1.03, 10A-1-1.08, 10A-1-1.12, 10A-1-3.05, 10A-1-3.06, 10A-1-3.32, 10A-1-3.42, 10A-1-4.01, and 10A-1-4.02, Code of Alabama 1975, as amended by Act 2018-125; Sections 10A-1-4.04, 10A-1-4.06, 10A-1-4.11, 10A-1-4.13, 10A-1-4.15, 10A-1-4.21, 10A-1-4.23, and 10A-1-4.24, Code of Alabama 1975; Section 10A-1-4.25, Code of Alabama 1975, as amended by Act 2018-125; Section 10A-1-4.26, Code of Alabama 1975; Sections 10A-1-4.31, 10A-1-5.01, and 10A-1-5.08, Code of Alabama 1975, as amended by Act 2018-125; Section 10A-1-6.01, Code of Alabama 1975; Sections 10A-1-6.02, 10A-1-7.01, 10A-1-7.04, and 10A-1-7.11, Code of Alabama 1975, as amended by Act 2018-125; Section 10A-1-7.21, Code of Alabama 1975; Sections 10A-1-7.31, 10A-1-8.01, and 10A-1-8.02, Code of Alabama 1975, as amended by Act 2018-125; Sections 10A-1-8.04, 10A-1-9.01, 10A-4-2.02, 10A-4-4.01, 10A-4-4.02, 10A-4-5.01, 10A-4-5.04, 10A-5A-10.01, 10A-5A-10.03, 10A-5A-10.04, 10A-5A-10.05, and 10A-5A-10.07, Code of Alabama 1975; Section 10A-5A-10.08, Code of Alabama 1975, as amended by Act 2018-125; Sections 10A-8A-9.02, 10A-8A-9.04, 10A-8A-9.05, 10A-8A-9.06, 10A-8A-9.08, and 10A-8A-9.09, as added to the Code of Alabama 1975 by Act 2018-125; Sections 10A-9A-10.02, 10A-9A-10.04, 10A-9A-10.05, 10A-9A-10.06, and 10A-9A-10.08, Code of Alabama 1975; Section 10A-9A-10.09, Code of Alabama 1975, as amended by Act 2018-125; and Sections 10A-10-1.09, 10A-10-1.12, 10A-10-1.15, 10A-10-1.16, 10A-11-1.01, 10A-11-1.03, 10A-11-1.04, 10A-11-1.06, 10A-11-1.12, 10A-30-2.01, 10A-30-2.03, 10A-30-2.04, 10A-30-2.05, 10A-30-2.06, 10A-30-2.09, 10A-30-2.12, and 10A-30-2.13, Code of Alabama 1975; are amended to read as follows:

§10A-1-1.02.

"(a) All provisions of this chapter shall apply to all entities formed under pursuant to or governed by Chapters 2 to 11, inclusive, including Chapter 2A, except to the extent, if any, that any provision of this chapter is inconsistent with or as otherwise provided by the provisions of this title or other statutory or constitutional provisions specifically applicable to the entity.

"(b) The provisions of this chapter shall apply to entities formed under pursuant to or governed by Chapter 16, Chapter 17, Chapter 20, and Chapter 30 only as provided therein or expressly provided in this chapter.

"(c) If a provision of this chapter conflicts with a provision in another chapter of this title, the provision of the other chapter, to the extent of the conflict, supersedes the provision of this chapter.

§10A-1-1.03.

"As used in this title, unless the context otherwise requires, the following terms mean:

"(1) AFFILIATE. A person who controls, is controlled by, or is under common control with another person. An affiliate of an individual includes the spouse, or a parent or sibling thereof, of the individual, or a child, grandchild, sibling, parent, or spouse of any thereof, of the individual, or an individual having the same home as the individual, or a trust or estate of which an individual specified in this sentence is a substantial beneficiary; a trust, estate, incompetent, conservatee, protected person, or minor of which the individual is a fiduciary; or an entity of which the individual is director, general partner, agent, employee or the governing authority or member of the governing authority.

"(2) ASSOCIATE. When used to indicate a relationship with:

"(A) a domestic or foreign entity or organization for which the person is:

"(i) an officer or governing person; or

"(ii) a beneficial owner of 10 percent or more of a class of voting ownership interests or similar securities of the entity or organization;

"(B) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar fiduciary capacity;

"(C) the person's spouse or a relative of the person related by consanguinity or affinity within the fifth degree who resides with the person; or

"(D) a governing person or an affiliate or officer of the person.

"(3) ASSOCIATION. Includes, but is not limited to, an unincorporated nonprofit association as defined in Chapter 17 and an unincorporated professional association as defined in Article 1 of Chapter 30.

"(4) BUSINESS CORPORATION. A corporation or foreign corporation as defined in Chapter 2 or Chapter 2A, as applicable.

"(5) BUSINESS TRUST. A business trust as defined in Chapter 16.

"(6) CERTIFICATE OF DISSOLUTION. Any document such as a certificate of dissolution, statement of dissolution, or articles of dissolution, required or permitted to be filed publicly with respect to an entity's dissolution and winding up of its business, activity, activities, not for profit activity, or affairs.

"(7) CERTIFICATE OF FORMATION.

"(A) the document required to be filed publicly under Article 3, Chapter 2A, Chapter 5A or Chapter 9A 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.

"(8) CERTIFICATE OF OWNERSHIP. An instrument evidencing an ownership interest or membership interest in an entity.

"(9) CERTIFICATED OWNERSHIP INTEREST. An ownership interest of a domestic entity represented by a certificate.

"(10) CERTIFICATION. Duly authenticated by the proper officer or filing officer of the jurisdiction the laws of which govern the internal affairs of an entity.

"(11) CONTRIBUTION. A tangible or intangible benefit that a person transfers to an entity in consideration for an ownership interest in the entity or otherwise in the person's capacity as an owner or a member. A benefit that may constitute a contribution transferred in exchange for an ownership interest or transferred in the transferor's capacity as an owner or member may include cash, property, services rendered, a contract for services to be performed, a promissory note or other obligation of a person to pay cash or transfer property to the entity, or securities or other interests in or obligations of an entity. In either case, the benefit does not include cash or property received by the entity:

"(A) with respect to a promissory note or other obligation to the extent that the agreed value of the note or obligation has previously been included as a contribution; or

"(B) that the person intends to be a loan to the entity.

"(12) CONVERSION.

"(A) the continuance of a domestic entity as a foreign entity of any type;

"(B) the continuance of a foreign entity as a domestic entity of any type; or

"(C) the continuance of a domestic entity of one type as a domestic entity of another type.

"(13) CONVERTED ENTITY. An entity resulting from a conversion.

"(14) CONVERTING ENTITY. An entity as the entity existed before the entity's conversion.

"(15) COOPERATIVE. Includes an employee cooperative as defined in Chapter 11.

"(16) CORPORATION. Includes a domestic or foreign business corporation as defined in Chapter 2 or Chapter 2A, as applicable, a domestic or foreign nonprofit corporation as defined in Chapter 3, a domestic or foreign professional corporation as defined in Chapter 4, and those entities specified in Chapter 20 as corporate.

"(17) COURT. Every court and judge having jurisdiction in a case.

"(18) DAY. When used in the computation of time excludes the first day and includes the last day of the period so computed, unless the last day is a Saturday, Sunday, or legal holiday, in which event the period runs until the end of the next day that is not a Saturday, a Sunday, or a legal holiday. When the period of time to be computed is less than 7 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded.

"(19) DEBTOR IN BANKRUPTCY. A person who is the subject of:

"(A) an order for relief under the United States bankruptcy laws, Title 11, United States Code, or comparable order under a successor statute of general application; or

"(B) a comparable order under federal, state, or foreign law governing insolvency.

"(20) DIRECTOR. An individual who serves on the board of directors, by whatever name known, of a foreign or domestic corporation.

"(21) DISTRIBUTION. A transfer of property, including cash, from an entity to an owner or member of the entity in the owner's or member's capacity as an owner or member. The term includes a dividend, a redemption or purchase of an ownership interest, or a liquidating distribution.

"(22) DOMESTIC. With respect to an entity, that the entity is formed and exists pursuant to this title.

"(23) DOMESTIC ENTITY. An organization formed and existing under pursuant to this title.

"(24) EFFECTIVE DATE OF THIS TITLE. January 1, 2011.

"(25) ELECTRONIC. Relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

"(26) ELECTRONIC SIGNATURE. An electronic signature as that term is defined in the Alabama Electronic Transactions Act, Chapter 1A of Title 8, or any successor statute.

"(27) ELECTRONIC TRANSMISSION or ELECTRONICALLY TRANSMITTED. Any form or process of communication not directly involving the physical transfer of paper or another tangible medium, which (i) is suitable for the retention, retrieval, and reproduction of information by the recipient, and (ii) is retrievable in paper form by the recipient through an automated process used in conventional commercial practice.

"(28) ELECTRONIC WRITING. 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.

"(29) ENTITY. A domestic entity or foreign entity.

"(30) FILING ENTITY. A domestic entity that is a corporation, limited partnership, including a limited liability limited partnership, limited liability company, professional association, employee cooperative corporation, or real estate investment trust.

"(31) FILING INSTRUMENT. An instrument, document, or statement that is required or authorized permitted by this title to be filed delivered for filing by or for an entity with the to a filing officer in accordance with Article 4.

"(32) FILING OFFICER. The officer with whom a filing instrument is required or permitted to be filed under Article 4 or under any other provision of delivered for filing pursuant to this title.

"(33) FOREIGN. With respect to an entity, that the entity is formed and existing under the laws of a jurisdiction other than this state.

"(34) FOREIGN ENTITY. An organization formed and existing under the laws of a jurisdiction other than this state.

"(35) FOREIGN FILING ENTITY. A foreign entity that registers or is required to register as a foreign entity under Article 7.

"(36) FOREIGN GOVERNMENTAL AUTHORITY. A governmental official, agency, or instrumentality of a jurisdiction other than this state.

"(37) FOREIGN LIMITED LIABILITY LIMITED PARTNERSHIP. A foreign limited liability limited partnership as defined in Chapter 9A.

"(38) FOREIGN LIMITED LIABILITY PARTNERSHIP. A foreign limited liability partnership as defined in Chapter 8A.

"(39) FOREIGN LIMITED PARTNERSHIP. A foreign limited partnership as defined in Chapter 9A.

"(40) FOREIGN NONFILING ENTITY. A foreign entity that is not a foreign filing entity.

"(41) FUNDAMENTAL BUSINESS TRANSACTION. A merger, interest exchange, conversion, or sale of all or substantially all of an entity's assets.

"(42) GENERAL PARTNER.

"(A) each partner in a general partnership; or

"(B) a person who is admitted to a limited partnership as a general partner in accordance with the governing documents of the limited partnership.

"(43) GENERAL PARTNERSHIP. A partnership as defined in Chapter 8A. The term includes a registered limited liability partnership as defined in Chapter 8A.

"(44) GOVERNING AUTHORITY. A person or group of persons who are entitled to manage and direct the affairs of an entity under pursuant to this title and the governing documents of the entity, except that if the governing documents of the entity or this title divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, governing authority means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this title. The term includes the board of directors of a corporation, by whatever name known, or other persons authorized to perform the functions of the board of directors of a corporation, the general partners of a general partnership or limited partnership, the persons who have direction and oversight of a limited liability company, and the trust managers of a real estate investment trust. The term does not include an officer who is acting in the capacity of an officer.

"(45) GOVERNING DOCUMENTS.

"(A) in the case of a domestic entity:

"(i) the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and

"(ii) the other documents or agreements, including bylaws, partnership agreements of partnerships, limited liability company agreements of limited liability companies, or similar documents, adopted by the entity under pursuant to this title to govern the formation or the internal affairs of the entity; or

"(B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its jurisdiction of formation to govern the formation or the internal affairs of the entity.

"(46) GOVERNING PERSON. A person serving as part of the governing authority of an entity.

"(47) INDIVIDUAL. A natural person and the estate of an incompetent or deceased natural person.

"(48) INSOLVENCY. The inability of a person to pay the person's debts as they become due in the usual course of business or affairs.

"(49) INSOLVENT. A person who is unable to pay the person's debts as they become due in the usual course of business or affairs.

"(50) JUDGE OF PROBATE. The judge of probate of the county in which a domestic entity's certificate of formation is filed, or, with respect to a statement of authority under Chapter 8A, which is to be filed in the real property records of a particular county, the judge of probate of the county in which that statement is filed entity is required or permitted to deliver a filing instrument for filing pursuant to this title.

"(51) JURISDICTION OF FORMATION.

"(A) in the case of a domestic filing entity, this state;

"(B) in the case of a foreign entity, the jurisdiction in which the entity's certificate of formation or similar organizational instrument is filed, or if no certificate of formation or similar organizational instrument is filed, then the laws of the jurisdiction which govern the internal affairs of the foreign entity;

"(C) in the case of a general partnership which has filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership in accordance with Chapter 8A, in this state;

"(D) in the case of a foreign limited liability partnership, the laws of the jurisdiction which govern the filing of the foreign limited liability partnership's statement of limited liability partnership or such filing in that jurisdiction; and

"(E) in the case of a foreign or domestic nonfiling entity other than those entities described in subsection (C) or (D):

"(i) the jurisdiction the laws of which are chosen in the entity's governing documents to govern its internal affairs if that jurisdiction bears a reasonable relation to the owners or members or to the domestic or foreign nonfiling entity's business and affairs under the principles of this state that otherwise would apply to a contract among the owners or members; or

"(ii) if subparagraph (i) does not apply, the jurisdiction in which the entity has its principal place of business.

"(52) LAW. Unless the context requires otherwise, both statutory and common law.

"(53) LICENSE. A license, certificate of registration, or other legal authorization.

"(54) LICENSING AUTHORITY. The state court, state regulatory licensing board, or other like agency which has the power to issue a license or other legal authorization to render professional services.

"(55) LIMITED LIABILITY COMPANY. A limited liability company as defined in Chapter 5A.

"(56) LIMITED LIABILITY LIMITED PARTNERSHIP. A limited liability limited partnership as defined in Chapter 9A.

"(57) LIMITED LIABILITY PARTNERSHIP. A limited liability partnership as defined in Chapter 8A.

"(58) LIMITED PARTNER. A person who has been admitted to a limited partnership as a limited partner as provided by:

"(A) in the case of a domestic limited partnership, Chapter 9A; or

"(B) in the case of a foreign limited partnership, the laws of its jurisdiction of formation.

"(59) LIMITED PARTNERSHIP. A limited partnership as defined in Chapter 9A. The term includes a limited liability limited partnership as defined in Chapter 9A.

"(60) MANAGERIAL OFFICIAL. An officer or a governing person.

"(61) MEMBER.

"(A) a person defined as a member under Chapter 5A;

"(B) in the case of a nonprofit corporation formed pursuant to or governed by Chapter 3, a person having membership rights in a the nonprofit corporation in accordance with its governing documents as provided in Chapter 3;

"(C) in the case of an employee cooperative corporation formed pursuant to or governed by Chapter 11, a natural person who, as provided in Chapter 11, has been accepted for membership in and owns a membership share in an employee cooperative;

"(D) in the case of a nonprofit association, a person who, as provided in Chapter 17, may participate in the selection of persons authorized to manage the affairs of the nonprofit association or in the development of its policy.

"(62) MERGER. The combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:

"(A) one or more surviving domestic entities or non-code organizations;

"(B) the creation of one or more new domestic entities or non-code organizations, or one or more surviving domestic entities or non-code organizations; or

"(C) one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations.

"(63) NON-CODE ORGANIZATION. An organization other than a domestic entity.

"(64) NONFILING ENTITY. A domestic entity that is not a filing entity. The term includes a domestic general partnership, a limited liability partnership, and a nonprofit association.

"(65) NONPROFIT ASSOCIATION. An unincorporated nonprofit association as defined in Chapter 17. The term does not include a general partnership which has filed a statement of not for profit partnership in accordance with Chapter 8A, a limited partnership which is carrying on a not for profit purpose, or a limited liability company which is carrying on a not for profit purpose.

"(66) NONPROFIT CORPORATION. A domestic or foreign nonprofit corporation as defined in Chapter 3.

"(67) NONPROFIT ENTITY. An entity that is a nonprofit corporation, nonprofit association, or other entity that is organized solely for one or more nonprofit purposes.

"(68) OFFICER. 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.

"(69) ORGANIZATION. A corporation, limited partnership, general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for profit, not for profit, nonprofit, domestic, or foreign.

"(70) ORGANIZER. A person, who need not be an owner or member of the entity, who, having the capacity to contract, is authorized to execute documents in connection with the formation of the entity. The term includes an incorporator.

"(71) OWNER.

"(A) with respect to a foreign or domestic business corporation or real estate investment trust, a stockholder or a shareholder;

"(B) with respect to a foreign or domestic partnership, a partner;

"(C) with respect to a foreign or domestic limited liability company or association, a member; and

"(D) with respect to another foreign or domestic entity, an owner of an equity interest in that entity.

"(72) OWNERSHIP INTEREST. An owner's interest in an entity. The term includes the owner's share of profits and losses or similar items and the right to receive distributions. The term does not include an owner's right to participate in management or participate in the direction or oversight of the entity. An ownership interest is personal property.

"(73) PARENT ENTITY or PARENT ORGANIZATION. An entity or organization that:

"(A) owns at least 50 percent of the ownership or membership interest of a subsidiary; or

"(B) possesses at least 50 percent of the voting power of the owners or members of a subsidiary.

"(74) PARTNER. A limited partner or general partner.

"(75) PARTNERSHIP. Includes a general partnership, a limited liability partnership, a foreign limited liability partnership, a limited partnership, a foreign limited partnership, a limited liability limited partnership, and a foreign limited liability limited partnership.

"(76) PARTNERSHIP AGREEMENT. Any agreement (whether referred to as a partnership agreement or otherwise), written, oral or implied, of the partners as to the activities and affairs of a general partnership or a limited partnership. The partnership agreement includes any amendments to the partnership agreement. In the case of limited partnerships formed prior to October 1, 1998, partnership agreement includes the certificate of partnership.

"(77) PARTY TO THE MERGER. A domestic entity or non-code organization that under a plan of merger is combined by a merger. The term does not include a domestic entity or non-code organization that is not to be combined into or with one or more domestic entities or non-code organizations, regardless of whether ownership interests of the entity are to be issued under the plan of merger.

"(78) PERSON. An individual, including the estate of an incompetent or deceased individual, or an organization, whether created by the laws of this state or another state or foreign country, including, without limitation, a general partnership, limited liability partnership, limited partnership, limited liability limited partnership, limited liability company, corporation, professional corporation, nonprofit corporation, professional association, trustee, personal representative, fiduciary, as defined in Section 19-3-150 or person performing in any similar capacity, business trust, estate, trust, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

"(79) PRESIDENT.

"(A) the individual designated as president of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of the principal executive officer of an entity without regard to the designated name of the officer or committee.

"(80) PROFESSIONAL ASSOCIATION. A professional association as defined in Chapter 30.

"(81) PROFESSIONAL CORPORATION. A domestic or foreign professional corporation as defined in Chapter 4.

"(82) PROFESSIONAL ENTITY. A professional association and a professional corporation.

"(83) PROFESSIONAL SERVICE. Any type of service that may lawfully be performed only pursuant to a license issued by a state court, state regulatory licensing board, or other like agency pursuant to state laws.

"(84) PROPERTY. Includes all property, whether real, personal, or mixed, or tangible or intangible, or any right or interest therein.

"(85) REAL ESTATE INVESTMENT TRUST. An unincorporated trust, association, or other entity as defined in Chapter 10.

"(86) SECRETARY.

"(A) the individual designated as secretary of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of secretary of an entity without regard to the designated name of the officer or committee.

"(87) SECRETARY OF STATE. The Secretary of State of the State of Alabama.

"(88) SIGN or SIGNATURE. With the present intent to authenticate or adopt a writing:

"(A) to execute or adopt a tangible symbol to a writing, and includes any manual, facsimile, or conformed signature; or

"(B) to attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

"(89) STATE. Includes, when referring to a part of the United States, a state or commonwealth, and its agencies and governmental subdivisions, and a territory or possession, and its agencies and governmental subdivisions, of the United States.

"(90) SUBSCRIBER. A person who agrees with or makes an offer to an entity to purchase by subscription an ownership interest in the entity.

"(91) SUBSCRIPTION. An agreement between a subscriber and an entity, or a written offer made by a subscriber to an entity before or after the entity's formation, in which the subscriber agrees or offers to purchase a specified ownership interest in the entity.

"(92) SUBSIDIARY. An entity or organization at least 50 percent of:

"(A) the ownership or membership interest of which is owned by a parent entity or parent organization; or

"(B) the voting power of which is possessed by a parent entity or parent organization.

"(93) TREASURER.

"(A) the individual designated as treasurer of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of treasurer of an entity without regard to the designated name of the officer or committee.

"(94) TRUSTEE. A person who serves as a trustee of a trust, including a real estate investment trust.

"(95) UNCERTIFICATED OWNERSHIP INTEREST. An ownership interest in a domestic entity that is not represented by a certificate.

"(96) VICE PRESIDENT.

"(A) the individual designated as vice president of an entity under the governing documents of the entity; or

"(B) the officer or committee of persons authorized to perform the functions of the president of the entity on the death, absence, or resignation of the president or on the inability of the president to perform the functions of office without regard to the designated name of the officer or committee.

"(97) WRITING or WRITTEN. Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

§10A-1-1.08.

"(a) The provisions of this title as described by this section may be cited as provided by this section.

"(b) Chapter 2 or Chapter 2A, as applicable, and the provisions of Chapter 1 to the extent applicable to business corporations may be cited as the Alabama Business Corporation Law.

"(c) Chapter 3 and the provisions of Chapter 1 to the extent applicable to nonprofit corporations may be cited as the Alabama Nonprofit Corporation Law.

"(d) Chapter 4 and the provisions of Chapter 1 to the extent applicable to professional corporations may be cited as the Alabama Professional Corporation Law.

"(e) Chapter 5A and the provisions of Chapter 1 to the extent applicable to limited liability companies may be cited as the Alabama Limited Liability Company Law.

"(f) Chapter 8A and the provisions of Chapter 1 to the extent applicable to general partnerships may be cited as the Alabama Partnership Law.

"(g) Chapter 9A and the provisions of Chapter 1 to the extent applicable to limited partnerships may be cited as the Alabama Limited Partnership Law.

"(h) Chapter 10 and the provisions of Chapter 1 to the extent applicable to real estate investment trusts may be cited as the Alabama Real Estate Investment Trust Law.

"(i) Chapter 11 and the provisions of (A) Chapter 1 and (B) Chapter 2 or Chapter 2A, as applicable, to the extent applicable to employee cooperative corporations may be cited as the Alabama Employee Cooperative Corporations Law.

"(j) Chapter 17 may be cited as the Alabama Unincorporated Nonprofit Association Law.

§10A-1-1.12.

"For entities other than general partnerships, if the formation of an entity does not occur when a certificate of formation or similar instrument filed with the Secretary of State or the judge of probate, as the case may be filing officer, or with a foreign governmental authority takes effect, the law governing the entity's formation and internal affairs is the law of the entity's jurisdiction of formation.

§10A-1-3.05.

"Unless provided otherwise in a chapter of this title governing a filing entity:

"(a) The certificate of formation must state:

"(1) the name of the filing entity being formed;

"(2) the type of filing entity being formed;

"(3) for filing entities other than limited partnerships, the purpose or purposes for which the filing entity is formed, which may be stated to be or include any lawful purpose for that type of entity;

"(4) the period of duration, if the entity is not formed to exist perpetually;

"(5) the street address and, if different, the mailing address of the initial registered office of the filing entity and the name of the initial registered agent of the filing entity at the office;

"(6) the name and address of each:

"(A) organizer for the filing entity, unless the entity is formed under a plan pursuant to a statement of conversion or merger; or

"(B) general partner, if the filing entity is a limited partnership;

"(7) if the filing entity is formed under a plan of pursuant to a conversion or merger, a statement to that effect and, if formed under a plan of pursuant to a conversion, the name, mailing address of the principal office, date of formation, prior form of organization entity, and jurisdiction of formation of the converting entity; and

"(8) any other information required by this title including, without limitation, any information required by the specific chapter of this title governing the filing entity or by Article 8 to be included in the certificate of formation for the filing entity.

"(b) The certificate of formation may contain other provisions not inconsistent with law relating to the organization, ownership, governance, business, or affairs of the filing entity.

"(c) Except as provided by Section 10A-1-3.04, Article 4 governs the signing and filing of a certificate of formation for a domestic entity.

§10A-1-3.06.

"The Unless provided otherwise in a chapter of this title governing an entity, the formation and existence of a domestic entity that is a converted entity in a conversion or that is to be created under pursuant to a plan of merger takes effect and commences on the effectiveness of the conversion or merger, as appropriate.

§10A-1-3.32.

"(a) This section applies to entities other than (i) corporations formed under pursuant to or governed by Chapter 2, professional corporations formed under Chapter 2A, or Chapter 4, and real estate investment trusts formed pursuant to or governed by Chapter 10, each of which is governed by the separate recordkeeping requirements and record inspections provisions of Chapter 2 or Chapter 2A, as applicable, and (ii) nonprofit corporations formed pursuant to or governed by Chapter 3, limited liability companies formed under pursuant to or governed by Chapter 5A, general partnerships formed pursuant to or governed by Chapter 8A, and limited partnerships formed under pursuant to or governed by Chapter 9A, each of which are governed by the separate recordkeeping requirements and record inspection provisions set forth in each entity's respective chapter governing that entity.

"(b) With respect to an entity covered by this section, the books and records maintained under the chapter of this title applicable to the entity and any other books and records of the entity, wherever situated, are subject to inspection and copying at the reasonable request, and at the expense of, any owner or member or the owner's or member's agent or attorney during regular business hours. The right of access extends to the legal representative of a deceased owner or member or owner or member under legal disability. The entity shall also provide former owners and members with access to its books and records pertaining to the period during which they were owners or members.

"(c) The governing documents of the entity may not unreasonably restrict an owner's or member's right to information or access to books and records.

"(d) Any agent or governing person of an entity who, without reasonable cause, refuses to allow any owner or member or the owner's or member's agent or legal counsel to inspect any books or records of the entity shall be personally liable to the agent or member for a penalty in an amount not to exceed 10 percent of the fair market value of the ownership interest of the owner or member, in addition to any other damages or remedy.

§10A-1-3.42.

"(a) A certificated ownership interest in a domestic entity may contain an impression of the seal of the entity, if any. A facsimile of the entity's seal may be printed or lithographed on the certificate.

"(b) If a domestic entity is authorized to issue ownership interests of more than one class or series, each certificate representing ownership interests that is issued by the entity must conspicuously state on the front or back of the certificate:

"(1) the designations, preferences, limitations, and relative rights of the ownership interests of each class or series to the extent they have been determined and the authority of the governing authority to make those determinations as to subsequent classes or series; or

"(2) that the information required by subsection (1) is stated in the domestic entity's governing documents and that the domestic entity, on written request to the entity's principal place of business or registered office, will provide a free copy of that information to the record holder of the certificate.

"(c) A certificate representing ownership interests must state on the front of the certificate:

"(1) that the domestic entity is organized under the laws of this state;

"(2) the name of the person to whom the certificate is issued;

"(3) the number and class of ownership interests and the designation of the series, if any, represented by the certificate; and

"(4) if the ownership interests are shares, the par value of each share represented by the certificate, or a statement that the shares are without par value.

"(d) A certificate representing ownership interests that is subject to a restriction, placed by or agreed to by the domestic entity under pursuant to this title on the transfer or registration of the transfer of the ownership interests must conspicuously note the existence of the restriction on the front or back of the certificate. Even if not so noted, a restriction is enforceable against a person with actual knowledge of the restriction.

"(e) Abbreviations may be used in the inscribing of certificates representing ownership interests. Without limiting the use of other abbreviations, however, the following or substantially similar abbreviations may be used in the inscribing of such certificates, and shall be construed as though they were written out in full and shall be accorded the meaning ascribed herein.

"Abbreviation:Meaning:
"TEN COMAs tenants in common.
"JTWROSAs joint tenants with rights of survivorship and not as tenants in common.
"JT TENAs joint tenants with rights of survivorship and not as tenants in common.
"CUSTODIAN FOR, UTMA As custodian for______(name of minor) under the Uniform Transfers to Minor Act.

§10A-1-4.01.

"(a) A filing instrument must be:

"(1) signed by the person or persons required by this title or the applicable chapter to execute, and to verify, if required by the applicable chapter, the filing instrument; and

"(2) delivered, together with one exact or conformed copy and the additional exact or conformed copies as required by Section 10A-1-4.02(b) or (e) or other provision of this title, to the judge of probate or Secretary of State, as the case may be filing officer under the provisions of Section 10A-1-4.02, in person or by mail or courier, or, if permitted by the respective filing officer, by facsimile or electronic transmission or any other comparable form of delivery.

"(b) A person authorized by this title to sign a filing instrument for an entity is not required to show evidence of the person's authority as a requirement for filing.

"(c) The execution of a filing instrument constitutes an affirmation by each person executing the instrument that the facts therein are true, under penalties for perjury prescribed by Section 13A-10-103 or its successor.

"(d) If a person required by this title to execute any filing instrument fails or refuses to do so, any person who is adversely affected by the failure or refusal may petition the circuit court for the judicial circuit in which the county is located where under, pursuant to this title the filing instrument would be filed, or if it would be filed with the Secretary of State, in the circuit court in the county in which the registered agent is located, and if no registered agent is required, in the circuit court in the county in which the entity has its principal place of business in this state, and if the entity does not have a place of business in this state, in the Circuit Court of Montgomery County, to direct the execution of the filing instrument. If the court finds that it is proper for the filing instrument to be executed and that any person so designated has failed or refused to execute the filing instrument, it shall order the judge of probate of the county or the Secretary of State, as the case may be, filing officer to record an appropriate filing instrument.

§10A-1-4.02.

"(a) The following filing instruments shall be delivered to the judge of probate for filing, except as the chapter applicable to an entity or other provision of this title provides for filing by the Secretary of State or another filing officer:

"(1) certificates of formation or any amendments or restatements thereof;

"(2) certificates of dissolution, other than a statement of dissolution of a general partnership or a statement of cancellation by a limited liability partnership;

"(3) certificates of revocation;

"(4) certificates of correction to any filing instrument required to be delivered to the office of the judge of probate for filing; and

"(5) any other filing instrument required or permitted under pursuant to this title to be delivered to the judge of probate for filing.

"(b) Any of the following filing instruments delivered to the office of the judge of probate for filing in accordance with subsections (a)(1) through (a)(4) shall be accompanied by an additional exact or conformed copy to permit the judge of probate to transmit to the Secretary of State a certified copy thereof as required by subsection (g): (e).

"(1) certificates of formation;

"(2) amendments to certificates of formation that alter the name of any entity;

"(3) restated certificates of formation;

"(4) certificates of dissolution;

"(5) certificates of revocation; and

"(6) certificates of correction correcting any of the foregoing filing instruments.

"(c) The following filing instruments shall be delivered to the Secretary of State for filing:

"(1) certificates, articles, or statements of merger, statements of conversion, and articles of share exchange;

"(2) statements or registrations of a foreign entity for authority to transact business in this state and any statements, notices, or certificates of withdrawal or termination or statements, notices, or certificates evidencing the same or required or authorized under Article 7 of this chapter;

"(3) the annual report of a business corporation, which may be made as provided in Section 10A-2-16.22 Article 16 of Chapter 2, or Article 16 of Chapter 2A, as applicable, by filing with the Department of Revenue the public record information required by Chapter 14A of Title 40, together with the prescribed fee for the annual report;

"(4) for (i) corporations created by an act of the Legislature prior to the adoption of the Constitution of Alabama of 1901, or for and (ii) entities or organizations which have resulted from are the converted or surviving entities or organizations of a merger, share exchange, or conversion, all filing instruments required by this title to be delivered to the judge of probate for filing shall be delivered to the Secretary of State for filing, except for (i) certified copies of statements of authority, denial, or cancellation thereof permitted to be delivered to the judge of probate for filing pursuant to Chapter 8A, (ii) any documents permitted to be delivered to the judge of probate for filing pursuant to Chapter 17, and (iii) certified copies of statements of merger or conversion permitted to be delivered to the judge of probate for filing pursuant to Chapter 1, Chapter 2A, Chapter 5A, Chapter 8A or Chapter 9A;

"(5) all filing instruments and any other filing instrument document required or permitted under this title to be delivered to the Secretary of State for filing pursuant to Chapter 2 or Chapter 2A;

"(7)(6) statements and any other document required or permitted to be delivered to the Secretary of State for filing under pursuant to Chapter 8A; and

"(7) any other filing instruments or document required or permitted to be delivered to the Secretary of State for filing pursuant to this title;

"(6) (8) articles of correction of any filing instrument required or permitted to be delivered to the Secretary of State for filing; and

"(8) (9) any other filing instrument or document required or permitted to be filed under pursuant to this title and not expressly required or permitted to be delivered to the Secretary of State or judge of probate or other designated filing office for filing.

"(d) Certificates, articles, or statements of merger or articles of share exchange, and statements of conversion delivered to the Secretary of State for filing shall be accompanied by the additional number of exact or conformed copies of articles as may be required for purposes of subsection (f) hereof.

"(e)(d) If the judge of probate or Secretary of State, as the case may be, filing officer finds that a filing instrument delivered under this section and Section 10A-1-4.01 substantially conforms to the provisions of this title that apply to the entity and that all required fees have been paid, and if, in the case of a certificate of formation or an amendment to a certificate of formation that would change the name of the entity, the judge of probate filing officer finds that the name of the entity has been reserved under Article 5 of this chapter, the judge of probate or Secretary of State, as the case may be, filing officer shall file it immediately upon delivery by:

"(1) endorsing "filed," together with his or her name and official title and the date and time of receipt on the instrument and all copies required hereunder and on the receipt for the filing fee;

"(2) accepting it into the filing system adopted by the judge of probate or Secretary of State filing officer and assigning the instrument a date of filing; and

"(3) delivering a copy thereof, endorsed as provided in subdivision (1), with the filing fee receipt, or acknowledgment of receipt of the instrument if no filing fee is required, to the entity or its representative.

"(f)(e) In the case of any of the filing instruments described in subsection (b), the judge of probate shall within 10 days transmit a certified copy of the filing instrument to the Secretary of State. In the case of certificates, articles, or statements of merger, statements of conversion, or articles of share exchange, the Secretary of State shall promptly transmit a certified copy thereof to the office of the judge of probate of the county in which each domestic entity's certificate of formation, if any, is filed.

"(g)(f) If the judge of probate or Secretary of State, as the case may be, filing officer refuses to file a filing instrument, he or she the filing officer shall return it to the domestic or foreign entity or its representative within seven days after the filing instrument was delivered, together with a brief, written explanation of the reason for his or her the refusal.

"(h)(g) The judge of probate's or Secretary of State's duty of the filing officer to file filing instruments under pursuant to this title is ministerial. His or her filing Filing or refusing to file a filing instrument by the filing officer does not:

"(1) affect the validity or invalidity of the filing instrument in whole or in part;

"(2) relate to the correctness or incorrectness of information contained in the filing instrument; or

"(3) create a presumption that the filing instrument is valid or invalid or that information contained in the filing instrument is correct or incorrect.

"(i)(h) The Secretary of State shall keep (1) an alphabetical list of all domestic entities and registered foreign entities, the certificates of formation, the statements under Chapter 8A, or statements or registrations for authority to transact business in this state, for which are filed in his or her office, together with (2) with respect to those domestic entities and registered foreign entities, all filing instruments and any other document required or permitted to be delivered to the Secretary of State for filing pursuant to this title, and (3) the data contained in the those filing instruments.

§10A-1-4.04.

"(a) A court, public office, or official body shall accept a certificate issued as provided by this title by the judge of probate or Secretary of State filing officer or a copy of a filing instrument accepted by the judge of probate or Secretary of State filing officer for filing as provided by this title that is certified by the judge of probate or Secretary of State filing officer as prima facie evidence of the facts stated in the certificate or instrument.

"(b) A court, public office, or official body may record a certificate or certified copy described by subsection (a).

"(c) A court, public office, or official body shall accept a certificate issued under an official seal by the judge of probate or Secretary of State filing officer as to the existence or nonexistence of facts that relate to an entity that would not appear from a certified copy of a filing instrument as prima facie evidence of the existence or nonexistence of the facts stated in the certificate.

§10A-1-4.06.

"Each judge of probate and the Secretary of State filing officer shall have the powers reasonably necessary to perform the duties required of him or her by this title.

§10A-1-4.11.

"A filing instrument submitted to the Secretary of State or judge of probate, as the case may be, filing officer takes effect on filing, except as permitted by Section 10A-1-4.12 or as provided by the provisions of this title which apply to the entity making the filing or other law.

§10A-1-4.13.

"(a) The parties to a filing instrument may abandon the filing instrument if the instrument has not taken effect.

"(b) To abandon a filing instrument the parties to the instrument must file with the filing officer a certificate of abandonment.

"(c) A certificate of abandonment must:

"(1) be signed on behalf of each entity that is a party to the action or transaction by the person authorized by this title to act on behalf of the entity;

"(2) state the nature of the filing instrument to be abandoned, the date of the instrument, and the parties to the instrument; and

"(3) state that the filing instrument has been abandoned in accordance with the agreement of the parties.

"(d) On the filing of the certificate of abandonment, the action or transaction evidenced by the original filing instrument is abandoned and may not take effect.

"(e) If in the interim before a certificate of abandonment is filed, the name of an entity that is a party to the action or transaction becomes indistinguishable on the records of the Secretary of State from the name of another entity already on file or reserved or registered under pursuant to this title, the filing officer may not file the certificate of abandonment unless the entity by or for whom the certificate is filed changes its name in the manner provided by this title for that entity.

§10A-1-4.15.

"An acknowledgment of filing issued or other action taken by the Secretary of State or judge of probate, as the case may be, filing officer affirming the filing of a filing instrument that has a specific delayed effective date must state the date and time at which the instrument takes effect.

§10A-1-4.21.

"(a) A filing instrument that has been filed with the Secretary of State or judge of probate, as the case may be, filing officer that is an inaccurate record of the event or transaction evidenced in the instrument, that contains an inaccurate or erroneous statement, or that was defectively or erroneously signed, sealed, acknowledged, or verified may be corrected by filing a certificate of correction.

"(b) A certificate of correction must be signed by the person authorized by this title to act on behalf of the entity.

§10A-1-4.23.

"The certificate of correction must:

"(1) state the name of the entity;

"(2) identify the filing instrument to be corrected by description and date of filing with the Secretary of State or judge of probate, as the case may be filing officer;

"(3) identify the inaccuracy, error, or defect to be corrected; and

"(4) state in corrected form the portion of the filing instrument to be corrected.

§10A-1-4.24.

"The certificate of correction shall be filed with and acted on by the Secretary of State or judge of probate, as the case may be, filing officer as provided in Section 10A-1-4.02.

§10A-1-4.25.

"(a) After the Secretary of State or the judge of probate, as the case may be, filing officer files the certificate of correction, the filing instrument is considered to have been corrected on the date the filing instrument was originally filed, except as otherwise provided by subsection (b).

"(b) As to a person who acted in reliance on the filing instrument prior to its correction and who is adversely affected by that correction, the filing instrument is considered to have been corrected on the date the certificate of correction is filed.

"(c) An acknowledgment of filing or a similar instrument issued by the Secretary of State or judge of probate, as the case may be, filing officer before a filing instrument is corrected, with respect to the effect of filing the original filing instrument, applies to the corrected filing instrument as of the date the corrected filing instrument is considered to have been filed under this section.

§10A-1-4.26.

"A filing instrument that an entity files with the Secretary of State or the judge of probate, as the case may be, filing officer may be amended or supplemented in accordance with the provisions of the chapter that apply to that entity or in accordance with that entity's governing documents. If neither the chapter that applies to that entity nor the governing documents of that entity provides or prohibits a process for the approval and filing of an amendment or supplement to that filing instrument for that entity, then that filing instrument may be amended or supplemented and filed utilizing the same process for approval and filing as was used to approve and file that filing instrument.

§10A-1-4.31.

"(a) The judge of probate or the Secretary of State, as the case may be, filing officer shall collect the following fees when the filing instruments described in this title are delivered to him or her for filing:

"FILING INSTRUMENTFEE FOR STATE OF ALABAMAFEE FOR THE JUDGE OF PROBATE
"(1) Certificate of formation and restated certificate of formation (Except for filings pursuant to Chapter 2 or Chapter 2A)$100$50
"(2) Amendment Amendments to certificate of formation (Except for filings pursuant to Chapter 2 or Chapter 2A)$50$25
"(3) Name reservations and notice of transfer of name reservation$25No fee
"A. less than 24 hours$25No fee
"B. 24 hours or more$10No fee
"(4) Certificate, articles, or statements of dissolution (other than a statement of dissolution or cancellation under (Except for filings pursuant to Chapter 2 or Chapter 2A or Chapter 8A)$100$50
"(5) Certificate, articles, or statement of merger; statement of conversion, articles of consolidation or share exchange$100$50
"(6)(5) Foreign entity registration including a statement of foreign limited liability partnership$150No fee
"(7)(6) Certificate of existence$25No fee
"A. Less than 24 hours$25No fee
"B. 24 hours or more$10No fee
"(7) Certificates, articles, or statements, and any document required or permitted to be filed with the Secretary of State pursuant to Chapter 2 or Chapter 2A$100No fee
"(8) Statements and any document required or permitted to be filed with the Secretary of State under pursuant to Chapter 8A$100No fee
"(9) Certified copy of statements and any of authority, denial, and cancellation thereof, document required or permitted to be filed with the judge of probate under pursuant to Chapter 8ANo fee$100
"(10) Certificates, articles, or statements of merger, conversion, and share exchange (Except for filings pursuant to Chapter 1, Chapter 2, Chapter 2A, Chapter 5A, Chapter 8A, and Chapter 9A)$100 $50
"(11) Certificates, articles, or statements of merger, conversion, and share exchange filed pursuant to Chapter 1, Chapter 2, Chapter 2A, Chapter 5A, Chapter 8A, and Chapter 9A$100No fee
"(12) Certified copy of certificates, articles, or statements of merger and conversion filed pursuant to Chapter 1, Chapter 2A, Chapter 5A, Chapter 8A, or Chapter 9ANo fee$5
"(10)(13) Any other filing instrument required or permitted to be filed under pursuant to this title$25$25

"(b) When appropriate, two checks shall accompany a filing instrument delivered to the judge of probate or a filing instrument is to be delivered for filing only to the Secretary of State, that filing instrument shall be accompanied by a check payable to the State of Alabama. When a filing instrument is only to be delivered for filing to the judge of probate, that filing instrument shall be accompanied by a check payable to the judge of probate. When a filing instrument is to be delivered for filing to the judge of probate, and a copy is to be forwarded to the Secretary of State for filing, two checks shall accompany that filing instrument and copy, one payable to the judge of probate for covering all charges for the judge of probate, and one payable to the State of Alabama covering all charges for the Secretary of State. In the case of any filing instrument delivered for filing to the judge of probate accompanied by a check for the charges for the Secretary of State, the check for the Secretary of State; and the check payable to the State of Alabama shall be forwarded by the judge of probate to the Secretary of State. In the case of any filing instrument delivered for filing to the Secretary of State accompanied by a check for the judge of probate, the check for the judge of probate shall be forwarded by the Secretary of State to the judge of probate.

"(c) There is hereby established in the State Treasury a fund to be known and designated as the Secretary of State Entity Fund. All funds, fees, charges, costs, and collections accruing to or collected by the Secretary of State under the foregoing provisions of this section or any other fees collected by the Secretary of State relating to entities shall be deposited into the State Treasury to the credit of the Secretary of State Entity Fund except as so provided in subsection (e).

"(d) All funds now or hereafter deposited in the State Treasury to the credit of the Secretary of State Entity Fund shall not be expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with the provisions of Article 4 of Chapter 4 of Title 41, and only in the amounts and for the purposes provided by the Legislature in the general appropriation bill or this section.

"(e) Seventy percent of funds collected by the Secretary of State in relation to entities during the fiscal year shall be deposited to the credit of the State General Fund.

"(f) The fees herein imposed for the office of the judge of probate shall be charged and paid into the appropriate county treasury or to the judge of probate as may be authorized or required by law.

"(g) The Secretary of State shall collect the following fees for copying and certifying the copy of any filing instrument relating to a domestic or foreign entity:

"(1) Two dollars ($2) a page for copying; and

"(2) Ten dollars ($10) for the certificate.

"(h) The judge of probate shall collect the following fees for copying and certifying the copy of any filing instrument relating to an entity:

"(1) Two dollars ($2) a page for copying; and

"(2) Ten dollars ($10) for the certificate.

"(i) For requests of immediate expedition of documents to be obtained in less than 24 hours, other than name reservations and certificates of existence, by the Secretary of State regarding document filings, certifications, and certificates to be obtained in less than 24 hours from the Secretary of State, other than documents which may be delivered to, or obtained from, the Secretary of State electronically, in addition to required fees, a one hundred dollar ($100) surcharge shall be imposed.

§10A-1-5.01.

"The filing of a certificate of formation by a filing entity under pursuant to this title, an application for registration or statement of foreign limited liability partnership by a foreign filing entity under pursuant to this title, or an application for reservation or registration of a name under pursuant to this article does not authorize the use of a name in this state in violation of a right of another under:

"(1) the The Trademark Act of 1946, as amended, 15 U.S.C. Section 1051 et seq.; or

"(2) Chapter 12 of Title 8; or

"(3) Common law.

§10A-1-5.08.

"The name of a domestic professional corporation or of a foreign professional corporation registered to transact business in this state must contain the words "professional corporation" or the abbreviation "P.C." or "PC" and shall otherwise conform to any rule promulgated by a licensing authority having jurisdiction of a professional service described in the certificate of formation of the professional corporation.

§10A-1-6.01.

"In this division:

"(1) "Delegate" means a person who is serving or who has served as a representative of an enterprise at the request of that enterprise at another enterprise. A person is a delegate to an employee benefit plan if the performance of the person's official duties to the enterprise also imposes duties on or otherwise involves service by the person to the plan or participants in or beneficiaries of the plan.

"(2) "Enterprise" means a domestic entity or an organization subject to this article, including a predecessor domestic entity or organization.

"(3) "Expenses" includes court costs and attorney's fees. The term does not include a judgment, a penalty, a settlement, a fine, or an excise or similar tax or an excise tax assessed against the person regarding an employee benefit plan.

"(4) "Former governing person" means a person who was a governing person of an enterprise.

"(5) "Official capacity" means:

"(A) with respect to a governing person, the office of the governing person in the enterprise or the exercise of authority by or on behalf of the governing person under pursuant to this title or the governing documents of the enterprise; and

"(B) with respect to a person other than a governing person, the elective or appointive office, if any, in the enterprise held by the person or the relationship undertaken by the person on behalf of the enterprise.

"(6) "Predecessor enterprise" means a sole proprietorship or organization that is a predecessor to an enterprise in:

"(A) a merger, conversion, consolidation, or other transaction in which the liabilities of the predecessor enterprise are transferred or allocated to the enterprise by operation of law; or

"(B) any other transaction in which the enterprise assumes the liabilities of the predecessor enterprise and the liabilities that are the subject matter of this chapter are not specifically excluded.

"(7) "Proceeding" means:

"(A) a threatened, pending, or completed action or other proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal;

"(B) an appeal of an action or proceeding described by paragraph (A); and

"(C) an inquiry or investigation that could lead to an action or proceeding described by paragraph (A).

"(8) "Representative" means a person serving as a partner, director, officer, venturer, proprietor, trustee, employee, or agent of an enterprise or serving a similar function for an enterprise.

"(9) "Respondent" means a person named as a respondent or defendant in a proceeding.

§10A-1-6.02.

"(a) Except as provided by subsection (b), this This article does not apply to a: general partnerships, limited liability partnerships, limited liability companies, limited partnerships, limited liability limited partnerships, nonprofit corporations, and business corporations.

"(1) general partnership;

"(2) limited liability company;

"(3) limited partnership;

"(4) nonprofit corporation; and

"(5) business corporation.

"(b) The governing documents of a general partnership, limited liability company, limited partnership, nonprofit corporation, or business corporation may adopt provisions of this article or may contain enforceable provisions relating to:

"(1) indemnification;

"(2) advancement or reimbursement of expenses;

"(3) insurance; or

"(4) other arrangements.

§10A-1-7.01.

"(a)(1) For purposes of this Article 7, the terms register, registering, and registered include (i) a foreign entity other than a foreign limited liability partnership delivering to the Secretary of State for filing an application for registration and the Secretary of State filing the application for registration, and (ii) a foreign limited liability partnership delivering to the Secretary of State for filing a statement of foreign limited liability partnership and the Secretary of State filing the statement of foreign limited liability partnership.

"(2) For purposes of this Article 7, the term registration includes (i) a filed application for registration and (ii) a filed statement of foreign limited liability partnership.

"(b) For purposes of this Article 7, the terms transact business and transacting business shall include conducting a business, activity, not for profit activity, and any other activity, whether or not for profit.

"(c) To transact business in this state, a foreign entity must register under this chapter if the foreign entity:

"(1) is a foreign entity, the formation of which, if formed in this state, would require the filing under Article 3 of a certificate of formation;

"(2) is a foreign limited liability partnership; or

"(3) affords limited liability under the law of its jurisdiction of formation for any owner or member.

"(d) A foreign entity described by subsection (b) must maintain the foreign entity's registration while transacting business in this state.

§10A-1-7.04.

"(a)(1) A foreign entity described in Section 10A-1-7.01(c), other than a foreign limited liability partnership, registers by delivering to the Secretary of State for filing an application for registration in accordance with the procedures in Article 4.

"(2) A foreign limited liability partnership registers by delivering to the Secretary of State for filing a statement of foreign limited liability partnership in accordance with the procedures in Article 4.

"(b) The application for registration of a foreign entity described in Section 10A-1-7.01(c) other than a foreign limited liability partnership must state:

"(1) the foreign entity's name or, if that name is not available for use in this state or otherwise would not comply with Article 5, a name that satisfies the requirements of Section 10A-1-7.07 under which the foreign entity will transact business in this state;

"(2) the foreign entity's type;

"(3) the foreign entity's jurisdiction of formation;

"(4) the date of the foreign entity's formation;

"(5) that the foreign entity exists as a valid foreign entity of the stated type under the laws of the foreign entity's jurisdiction of formation;

"(6) the date the foreign entity began or will begin to transact business in this state;

"(7) the street address and mailing address, if different, of the principal office of the foreign entity and;

"(8) the street address and mailing address, if different, of the initial registered office and the name of the initial registered agent for service of process which Article 5 requires to be maintained at that office.

"(c) The statement of foreign limited liability partnership must state:

"(1) the foreign limited partnership's name or, if that name is not available for use in this state or otherwise would not comply with Article 5, a name that satisfies the requirements of Section 10A-1-7.07 under which the foreign entity will transact business in this state;

"(2) the jurisdiction which governs the foreign limited liability partnership's partnership agreement and under which it is a limited liability partnership;

"(3) the date of the foreign limited liability partnership's formation;

"(4) that the foreign limited liability partnership exists as a valid foreign limited liability partnership under the laws of the jurisdiction which governs the foreign limited liability partnership's partnership agreement and under which it is a limited liability partnership;

"(5) the date the foreign limited liability partnership will begin to transact business in this state;

"(6) the street address and mailing address, if different, of the principal office of the foreign limited liability partnership;

"(7) the street address and mailing address, if different, of the initial registered office and the name of the initial registered agent for service of process which Article 5 requires to be maintained at that office;

"(d) The application for registration of a foreign entity described in Section 10A-1-7.01(c) other than a foreign limited liability partnership shall be executed by one or more persons authorized to execute an application for registration. The statement of foreign limited liability partnership shall be executed by one or more partners authorized to execute a statement of foreign limited liability partnership.

"(e) The status of the foreign entity after registration and the liability of its owners, managers, members, or managerial officials shall not be adversely affected by error or subsequent changes in the information stated in the application for registration or statement of foreign limited liability partnership, as applicable.

"(f) The fact that an application for registration or a statement of foreign limited liability partnership, as applicable, is on file with the Secretary of State is notice that the foreign entity is authorized to transact business in this state and as notice of all facts required to be set forth in the application for registration or the statement of foreign limited liability partnership, as applicable.

"(g) A foreign entity may register regardless of any differences between the law of the foreign entity's jurisdiction and of this state applicable to the governing of the internal affairs or to the liability of an owner, member, or managerial official. Notwithstanding the foregoing, no foreign entity may carry on in this state any business of a character that may not lawfully be carried on by a domestic entity of the same type.

"(h) A statement of foreign limited liability partnership is a filing instrument.

§10A-1-7.11.

"(a) A foreign entity registered in this state may withdraw the foreign entity's registration at any time by filing a certificate of withdrawal as provided in Article 4.

"(b) A certificate of withdrawal for a foreign entity described must state:

"(1) the name of the foreign entity as set forth on its registration;

"(2) the type of foreign entity and the foreign entity's jurisdiction of formation and, in the case of a foreign limited liability partnership, the jurisdiction which laws govern the foreign limited liability partnership and its partnership agreement;

"(3) the street address and mailing address, if different, of the principal office of the foreign entity;

"(4) that the foreign entity no longer is transacting business in this state;

"(5) that the foreign entity:

"(A) revokes the authority of the foreign entity's registered agent in this state to accept service of process; and

"(B) consents that service of process in any action, suit, or proceeding stating a cause of action arising in this state during the time the foreign entity was authorized to transact business in this state may be made on the foreign entity in accordance with the Alabama Rules of Civil Procedure and any other notice or demand required or permitted by law to be served on the foreign entity may be served in a manner similar to the procedure provided for the service of process by the Alabama Rules of Civil Procedure;

"(6)(A) a mailing address to which process may be mailed pursuant to the applicable service of process procedures of the Alabama Rules of Civil Procedure and to which any notice or demand required or permitted by law to be served on the foreign entity may be mailed; and

"(B) a commitment by the foreign entity that if the mailing address stated in the certificate of withdrawal under paragraph (A) changes, the foreign entity will promptly amend the certificate of withdrawal to update the address; and

"(7) that any money due or accrued to the state has been paid or describes the provisions that have been made for the payment of that money.

"(c) A certificate from the Alabama Department of Revenue that all applicable taxes and fees have been paid must be filed with the certificate of withdrawal.

"(d) If the existence or separate existence of a foreign entity registered in this state terminates, a certificate by an authorized governmental official of the entity's jurisdiction of formation that evidences the termination shall be filed with the Secretary of State.

"(e) The registration of the foreign entity terminates when a certificate of withdrawal under this section or a certificate evidencing termination under subsection (d) is filed.

§10A-1-7.21.

"(a) A foreign entity transacting business in this state, except a corporation or other organization formed under pursuant to federal law, may not maintain any action, suit, or proceeding in any court of this state until it has registered in this state.

"(b) The failure of a foreign entity to register in this state does not impair the validity of any contract or act of the foreign entity or prevent the foreign entity from defending any action, suit, or proceeding in any court of this state.

"(c) A foreign entity, by transacting business in this state without registration, shall be deemed to consent to service of process with respect to causes of action arising out of business transacted in this state, or to service of any notice or demand required or permitted by law, by registered mail addressed to the foreign entity at the office required to be maintained in the state or other jurisdiction where it is organized, or, if not so required, at the principal office of the entity, or by serving the entity by any method permitted under Sections 10A-1-5.35 and 10A-1-5.36.

"(d) The liability of an owner or owners of a foreign entity is governed by the laws of the state or other jurisdictions where it is organized, and any limitations on that liability are not waived solely by reason of having transacted business in Alabama without registration.

"(e) This division applies to a foreign entity transacting business in this state without registering with the Secretary of State.

§10A-1-7.31.

"A foreign entity may not conduct in this state a business, activity, not for profit activity, or any other activity, whether or not for profit, that is not permitted by this title to be transacted by the domestic entity to which it most closely corresponds, unless other law of this state authorizes the foreign entity to conduct the business, activity, not for profit activity, or any other activity, whether or not for profit.

§10A-1-8.01.

"(a) A conversion of an entity may be accomplished as provided in this section:

"(1) CORPORATIONS.

"a. The terms and conditions of a plan of conversion of a corporation, other than a nonprofit corporation, must be approved: (i) for corporations governed by Chapter 2, by all of the corporation's shareholders stockholders or as otherwise provided in the corporation's governing documents; (but in no case may the vote required for shareholder stockholder approval be set at less than a majority of the votes entitled to be cast by each voting group entitled by law to vote separately on the conversion); or (ii) for corporations governed by Chapter 2A, in accordance with the procedures and by the stockholder vote required by Article 9 of Chapter 2A. If the governing documents provide for approval of a conversion by less than all of a corporation's shareholders stockholders, approval of the conversion shall constitute corporate action subject to dissenter's rights pursuant to Article 13 of Chapter 2 or appraisal rights pursuant to Article 13 of Chapter 2A, as applicable, of the Alabama Business Corporation Law. No conversion of a corporation to a general or limited partnership may be effected without the consent in writing of each shareholder stockholder who will have personal liability with respect to the converted entity, notwithstanding any provision in the governing documents of the converting corporation providing for less than unanimous shareholder stockholder approval for the conversion.

"b. The terms and conditions of a plan of conversion of a nonprofit corporation must be approved by all the nonprofit corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, or as otherwise provided in the nonprofit corporation's governing documents; but in no case may the governing documents provide for approval by less than a majority of the members entitled to vote thereon. If the converting nonprofit corporation has no members, or no members entitled to vote thereon, the terms and conditions of the plan of conversion must be approved by a unanimous vote of the board of directors of the converting nonprofit corporation, or as otherwise provided in the governing documents; but in no case may the governing documents provide for approval by less than a majority of the board of directors.

"(2) LIMITED PARTNERSHIPS, INCLUDING LIMITED LIABILITY LIMITED PARTNERSHIPS. The terms and conditions of a plan of conversion of a limited partnership must be approved by all of the partners or as otherwise provided in the partnership agreement. No conversion of a limited partnership to a general partnership may be effected without the consent in writing of each limited partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the limited partnership agreement of the converting limited partnership providing for approval of the conversion by less than all partners.

"(3) LIMITED LIABILITY COMPANIES. The terms and conditions of a plan of conversion of a limited liability company must be approved by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents. No conversion of a limited liability company to a general or limited partnership may be effected without the consent in writing of each member who will have personal liability with respect to the converted entity, notwithstanding any provision in the governing documents of the converting limited liability company providing for less than unanimous member approval for the conversion.

"(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY PARTNERSHIPS. The terms and conditions of a plan of conversion of a general partnership must be approved by all of the partners or as otherwise provided in the partnership agreement. No conversion of a limited liability partnership to a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the partnership agreement of the converting limited liability partnership providing for less than unanimous partner approval for the conversion. If a general partnership is the converting organization and that general partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then that general partnership must, before proceeding with a conversion deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

"(5) REAL ESTATE INVESTMENT TRUST. The terms and conditions of a plan of conversion of a real estate investment trust must be approved by all of the trust's shareholders or as otherwise provided in the trust's declaration of trust; but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No conversion of a real estate investment trust to a general or limited partnership may be effected without the consent in writing of each shareholder who will have personal liability with respect to the converted entity, notwithstanding any provision in the declaration of trust of the converting real estate investment trust providing for less than unanimous shareholder approval for the conversion.

"(6) OTHER ENTITY. The terms and conditions of a plan of conversion of any entity not specified above must be approved by all owners of the converting entity. No conversion of any entity shall be effected without the consent in writing of any owner of the converting entity who has limited liability and who shall become an owner without limited liability protection of the converted entity.

"(7) ENTITY WITHOUT OWNERS. If the converting entity does not have owners, the terms and conditions of the plan of conversion must be unanimously approved by the governing authority of the converting entity.

"(b) The plan of conversion must be in writing, and:

"(1) must include the following:

"a. the name, type of entity, and mailing address of the principal office of the converting entity, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"b. the name, type of entity, and mailing address of the principal office of the converted entity after conversion;

"c. the terms and conditions of the conversion, including the manner and basis for converting interests in the converting entity into any combination of money, interests in the converted entity, and other consideration allowed in subsection (c); and

"d. the organizational documents of the converted entity; and

"(2) may include other provisions relating to the conversion not prohibited by law.

"(c) In connection with a conversion, rights or securities of or interests in a converting entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity or may be cancelled.

"(d) After a plan of conversion is approved and before the conversion takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of conversion originally.

"(b)(e) After the conversion is approved pursuant to subsection (a), the following documentation and filing requirements apply:

"(1) If the conversion is to a corporation, limited liability company, limited partnership, real estate investment trust, or other entity required to file a certificate of formation, the statement of conversion, when filed in accordance with Section 10A-1-4.02(c)(1), shall be deemed to:

"a. constitute a certificate of formation or amended and restated certificate of formation, as the case may be, for the converted entity; and

"b. shall satisfy the requirements of Section 10A-1-4.02(a).

"(2) In addition to any information or statements otherwise required by law to be included in a certificate of formation for a filing entity, a statement of conversion shall include the following:

"(1) if the converting entity is a domestic entity, the converting entity shall deliver to the Secretary of State for filing, a statement of conversion, which must include:

"a. the name, type of entity, and mailing address of the principal office of the converting entity, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"b. the date of the filing of the certificate of formation of the converting entity, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"c. a statement that the converting entity has been converted into the converted entity;

"d. the name and type of entity of the converted entity and the jurisdiction of its governing statute;

"e. the street and mailing address of the principal office of the converted entity;

"f. the date the conversion is effective under the governing statute of the converted entity;

"g. a statement that the conversion was approved as required by this chapter;

"h. a statement that the conversion was approved as required by the governing statute of the converted entity;

"i. a statement that a copy of the plan of conversion will be furnished by the converted entity, on request and without cost, to any owner of the converted or converting entity; and

"j. if the converted entity is a foreign entity not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-1-8.04(b); and

"(2) if the converted entity is (I) a domestic filing entity, the converting entity shall deliver to the Secretary of State for filing a certificate of formation or (II) a general partnership, the converting entity shall deliver to the Secretary of State for filing a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, as applicable, which certificate of formation or statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, must include, in addition to the information required in the chapter governing the certificate of formation of the converted entity, the following:

"a. The name and, mailing address of the principal office of, type of entity of the converted entity, and the jurisdiction of its the governing statute of the converting entity and its unique identifying number or other designation as assigned by the Secretary of State, if any., before conversion;

"b. The former name of the converting entity.

"c.b. A statement that the converting entity has been converted into the converted entity.;

"d.c. The public filing office where the certificate of formation, if any, of the converting entity is filed and the date of the filing thereof.;

"e.d. If the converted entity is one in which one or more owners lack limited liability protection, a statement that each owner of the converting entity who is to become an owner without limited liability protection of the converted entity has consented in writing to the conversion as required by this section.; and

"f.e. A statement that the conversion was approved pursuant to this section and, if either the converting entity or the converted entity is a foreign entity, that the conversion was approved as required by the governing statute of such foreign entity.;

"(3) if the converting entity is required pursuant to subsections (e)(2) and (e)(3) to deliver to the Secretary of State for filing both (I) a statement of conversion and (II)(A) a certificate of formation or (B) a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, then the converting entity shall deliver the statement of conversion and the certificate of formation or the statement of partnership, statement of not for profit partnership or statement of limited liability partnership, as applicable, to the Secretary of State simultaneously; and

"(4) if the converting entity is a general partnership and that partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then the converting organization must deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

"(f) A conversion becomes effective:

"(1) if the converted entity is a domestic filing entity, the effective date determined in accordance with Article 4 of this chapter; and

"(2) if the converted entity is not a domestic filing entity, as provided by the governing statute of the converted entity.

"(3)(g) After the conversion has become effective in accordance with subsection (c)(f), then, as provided in Section 10A-1-4.02(c)(4) except for (i) certified copies of statements of authority, denial, or cancellation thereof permitted to be delivered to the judge of probate for filing pursuant to Chapter 8A, (ii) any document permitted to be delivered to the judge of probate for filing pursuant to Chapter 17, and (iii) certified copies of statements of merger or conversion permitted to be delivered to the judge of probate for filing pursuant to Chapter 1, Chapter 2A, Chapter 5A, Chapter 8A, or Chapter 9A, all filing instruments with respect to the converted entity that would otherwise be required by this title to be delivered to the judge of probate for filing shall instead be delivered to the Secretary of State for filing.

"(c) A(h) When a conversion takes effect as follows becomes effective:

"(1) Upon the filing of the statement of conversion in accordance with Section 10A-1-4.02(c)(1), except as otherwise provided in subdivision (2).

"(2) Upon any delayed effective date if, but only if, each of the following requirements is satisfied:

"a. A delayed effective date is specified in the statement of conversion; and

"b. If either the converted entity or the converting entity is a foreign entity, then any filing required under the governing statute of such foreign entity to effectuate the conversion is filed before the effective date specified in the statement of conversion.

"(3) If a delayed effective date is specified, and the conditions of subdivision (2) are met, the conversion is effective at the close of business, unless a different hour is specified, on that date.

"(d) Conversion has the following effects:

"(1)a. Any entity that has been converted pursuant to this article is for all purposes the same entity that existed before the conversion and the conversion shall constitute a continuation of the existence of the converting entity in the form of the converted entity. The conversion shall not be deemed to constitute a dissolution or termination of the converting entity.

"b. If the Secretary of State has assigned a unique identifying number or other designation to the converting entity, that number or designation shall continue to be assigned to the converted entity.

"(2)a. All (1) all property, real, personal, and mixed owned by the converting entity; all rights, immunities, and franchises of the converting entity, of a public as well as a private nature; and all debts or obligations due the converting entity, shall remain owned and held by, vested in, and due to, the converted entity, shall not be deemed to have been transferred to the converted entity as a consequence of the conversion, and and contract rights owned by the converting entity remain vested in the converted entity without transfer, reversion or impairment, and the title to any property vested by deed or otherwise in the converting entity shall not revert or be in any way impaired by reason of the conversion.;

"b. A certified copy of the statement of conversion may be filed in the office of the judge of probate in any county in which the converting entity owned real property, to be recorded without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect the filing fees prescribed by Section 12-19-90. Any filing shall evidence chain of title, but lack of filing shall not affect the converted entity's title to the real property.

"(3) All(2) all debts, obligations, and or other liabilities of the converting entity shall continue as the debts, obligations, and or other liabilities of the converted entity and the converted entity shall continue to be responsible and liable for all the liabilities and obligations of the converting entity. Neither neither the rights of creditors, nor any the liens upon the property of the converting entity, shall be impaired by the conversion, and an owner of the converted entity shall continue to be liable for all obligations of the converting entity for which the owner was personally liable before the conversion.;

"(4) Any claim existing or any (3) an action or proceeding of any kind pending by or against the converting entity shall be prosecuted or continued continues as if the conversion had not occurred and the name of the converted entity may, but need not, be substituted for the name of the converting entity in any pending action or proceeding;.

"(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting entity remain vested in the converted entity;

"(5) except as otherwise provided in the statement of conversion, the terms and conditions of the statement of conversion take effect;

"(6) except as otherwise agreed, for all purposes of the laws of this state, the converting entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting entity;

"(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities and duties of the converting entity, shall be the rights, privileges, powers, interests in property, debts, liabilities and duties of the converted entity, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted entity;

"(8) if the converted entity is a domestic entity, for all purposes of the laws of this state, the converted entity shall be deemed to be the same entity as the converting entity, and the conversion shall constitute a continuation of the existence of the converting entity in the form of the converted entity;

"(9) if the converting entity is a domestic entity, the existence of the converted entity shall be deemed to have commenced on the date the converting entity commenced its existence in the jurisdiction in which the converting entity was first created, formed, organized, incorporated, or otherwise came into being;

"(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion;

(11) if the Secretary of State has assigned a unique identifying number or other designation to the converting entity and (i) the converted entity is formed pursuant to the laws of this state or (ii) the converted entity is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted entity; and

"(5)a. (12)a. An owner with limited liability protection remains liable, if at all, for an obligation incurred by the converting entity before the conversion takes effect only to the extent, if any, the owner would have been liable if the conversion had not occurred.

"b. An owner with limited liability protection who becomes an owner without limited liability protection is liable for an obligation of the converted entity incurred after conversion to the extent provided for by the laws applicable to the converted entity.

"(6)(13) An owner without limited liability protection who as a result of a conversion becomes an owner of a converted entity with limited liability protection remains liable for an obligation incurred by the converting entity before the conversion takes effect only to the extent, if any, the owner would have been liable if the conversion had not occurred.

"(i) If:

"(1) the converting entity is a filing entity, a general partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to transact business or not for profit activity in this state or a qualified foreign limited liability partnership;

"(2) the converted entity will be a filing entity, a general partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to transact business or not for profit activity in this state or a qualified foreign limited liability partnership;

"(3) the name of the converting entity and the converted entity are to be the same, other than words, phrases, or abbreviations indicating the type of entity; and

"(4) the name of the converted entity complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be;

"then, notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted entity shall for all purposes of this title be entitled to utilize the name of the converting entity without any further action by the converting entity or the converted entity.

"(j) A certified copy of the statement of conversion may be delivered to the office of the judge of probate in any county in which the converting entity owned real property, to be recorded without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any filing shall evidence chain of title, but lack of filing shall not affect the converted entity's title to the real property.

§10A-1-8.02.

"(a) Pursuant to an approved plan of merger, a corporation, limited partnership, limited liability company, general partnership, real estate investment trust, or any other entity may merge with any other entity or A merger of two or more entities, whether the other entity or entities are the same or another form of entity, may be accomplished as provided in this section.

"(b) A plan of merger shall include the following:

"(1) The name of each entity that is a party to the merger.

"(2) The name of the surviving entity into which the other entity or entities will merge.

"(3) The form of the surviving entity and the status in the surviving entity of each owner of an entity that is a party to the merger.

"(4) The terms and conditions of the merger.

"(5) The manner and basis of converting the interests of each party to the merger into interests or obligations of the surviving entity, or into money or other property in whole or part.

"(c) A plan of merger may set forth:

"(1) Amendments to the certificate of formation of the surviving entity.

"(2) Other provisions relating to the merger.

"(d) A plan of merger shall be approved as follows:

"(1) CORPORATIONS.

"a. In the case of a corporation, other than a nonprofit corporation, that is a party to a merger, the a plan of merger must be approved in accordance with the procedures and by the shareholder stockholder vote required by Section 10A-2-11.03 or Section 10A-2-11.04 Article 11 of Chapter 2 or Article 11 of Chapter 2A, as applicable. If the governing documents of the corporation provide for approval of a merger by less than all of the corporation's shareholders stockholders, approval of the merger shall constitute corporate action subject to dissenter's rights pursuant to Article 13 of Chapter 2, or appraisal rights pursuant to Article 13 of Chapter 2A, as applicable. No merger of a corporation into a general or limited partnership may be effected without the consent in writing of each shareholder stockholder who will have personal liability with respect to the resulting or surviving entity, notwithstanding any provision in the governing documents of the corporation that is a party to the merger providing for less than unanimous shareholder stockholder approval for the conversion.

"b. In the case of a nonprofit corporation, that is a party to the merger, a plan of merger must be approved by all the nonprofit corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, or as otherwise provided in the nonprofit corporation's governing documents; but in no case may the governing documents provide for approval by less than a majority of the members entitled to vote thereon. If the nonprofit corporation has no members, or no members entitled to vote thereon, the plan of merger must be approved by a unanimous vote of the board of directors of the nonprofit corporation, except as otherwise provided in the governing documents; but in no case may the governing documents provide for approval by less than a majority of the board of directors.

"(2) LIMITED PARTNERSHIPS. In the case of a limited partnership that is a party to the merger, the a plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a limited partnership with a general partnership in which the general partnership is the surviving or resulting entity may be effected without the consent in writing of each limited partner who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the limited partnership agreement of the merging limited partnership providing for approval of the merger by less than all partners.

"(3) LIMITED LIABILITY COMPANIES. In the case of a limited liability company that is a party to the merger, the a plan of merger must be approved in writing by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents. No merger of a limited liability company with a general or limited partnership that is the surviving or resulting entity may be effected without the consent in writing of each member who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the governing documents of the merging limited liability company providing for less than unanimous shareholder member approval for a merger.

"(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY PARTNERSHIPS. In the case of a general partnership that is a party to the merger, the a plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a limited liability partnership into a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the partnership agreement of the limited liability partnership providing for less than unanimous partner approval for a merger. All general partnerships, other than a general partnership that is created pursuant to the merger, that are parties to a merger must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership prior to delivering the statement of merger to the Secretary of State for filing.

"(5) REAL ESTATE INVESTMENT TRUST. In the case of a real estate investment trust that is a party to the merger, the a plan of merger must be approved in writing by all of the trust's shareholders or as otherwise provided in the trust's declaration of trust, but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No merger of a real estate investment trust with a general or limited partnership that is to be the surviving or resulting entity may be effected without the consent in writing of each shareholder who will have personal liability with respect to the surviving or resulting business entity, notwithstanding any provision in the declaration of trust of the converting real estate investment trust providing for less than unanimous shareholder approval for the merger.

"(6) OTHER ENTITY. In the case of an entity other than a corporation, limited partnership, limited liability company, general partnership, or real estate investment trust that is a party to the merger, by approval a plan of merger must be approved in writing of by all owners of the entity. No merger of any entity shall be effected without the consent in writing of any owner who has limited liability as an owner of an entity party to the merger, and who will have personal liability with respect to the surviving or resulting entity.

"(b) The plan of merger must be in writing, and:

"(1) must include the following:

"a. the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger;

"b. the name, type of entity, and mailing address of the principal office of the surviving entity and, if the surviving entity is to be created pursuant to the merger, the surviving entity's organizational documents;

"c. the terms and conditions of the merger, including the manner and basis for converting the interests in each entity that is a party to the merger into any combination of money, interests in the surviving entity, and other consideration as allowed by subsection (c); and

"d. if the surviving entity is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving entity's organizational documents; and

"(2) may include other provisions relating to the merger not prohibited by law.

"(c) In connection with a merger, rights or securities of or interests in a merged entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity or may be cancelled.

"(d) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of merger originally.

"(e) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of merger originally.

"(f) The merger takes effect as follows:

"(1) Upon the filing of the statement of merger in accordance with Section 10A-1-4.02(c)(1), except as otherwise provided in subdivision (2).

"(2) Upon any delayed effective date if, but only if, each of the following requirements is satisfied:

"a. A delayed effective date is specified in the statement of merger.

"b. If either the converted entity or the merging entity is a foreign entity, then any filing required under the governing statute of such foreign entity to effectuate the merger is filed before the effective date specified in the statement of merger.

"(3) If a delayed effective date is specified and the conditions of subdivision (2) are met, the merger is effective at the close of business, unless a different hour is specified, on that date in accordance with and subject to Section 10A-1-4.12.

"(g) The certificate of merger shall include the following:

"(1) The names of each of the entities which are to merge and their respective unique identifying numbers or other designations as assigned by the Secretary of State, if any.

"(2) The public office where the certificate of formation, if any, of each of the parties to the merger is filed.

"(3) A statement that a plan of merger has been approved by each of the entities which are to merge in the manner set forth in this article.

"(4) If the surviving or resulting entity is one in which one or more owners lack limited liability protection, a statement that each owner of an entity party to the merger who is to be an owner of the surviving or resulting entity without limited liability protection has consented in writing to the merger as required by this article.

"(5) The name of the surviving or resulting entity.

"(6) The date, or date and time, on which the merger becomes effective if it is not to be effective upon the filing of the certificate of merger.

"(7) That the plan of merger is on file at a place of business of the surviving or resulting entity, and shall state the address thereof.

"(8) That a copy of the plan of merger will be furnished by the surviving or resulting entity, on request and without cost, to any owner of any entity which is a party to the merger.

"(9) If the plan of merger includes any amendments to the certificate of formation of the surviving or resulting entity, a statement of all such amendments.

"(h) The certificate of merger shall be filed with the Secretary of State in accordance with Section 10A-1-4.02.

"(i) The merger shall have the following effects:

"(1) Every other entity party to the merger merges into the surviving entity which shall be deemed to be the resulting entity of the merger and the separate existence of every entity, other than the surviving or resulting entity, ceases.

"(2) All property, real, personal, and mixed owned by each of the merged entities; all rights, immunities, and franchises of the merged entities, of a public as well as a private nature; and all debts and obligations due the merged entities, are taken and deemed to be transferred and vested in the surviving or resulting entity without the necessity of any deed or other instrument of conveyance to the surviving or resulting entity and without payment and without collection by any filing officer of any deed or other transfer tax or fee. A certified copy of the certificate of merger may be filed in the real estate records in the office of the judge of probate in any county in which any entity a party to the merger owned real property, to be recorded without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect the filing fees prescribed by Section 12-19-90. Any filing shall evidence chain of title, but lack of filing does not affect the resulting entity's title to any real property.

"(3) The surviving or resulting entity shall be responsible and liable for all the liabilities and obligations of the entities that are parties to the merger; however, neither the rights of creditors nor any liens upon the property of the entities that are parties to the merger shall be impaired by the merger.

" (4) Any claim existing or action or proceeding, of any kind, pending by or against an entity that is a party to the merger may be prosecuted or continued as if the merger had not occurred, or the surviving or resulting entity may be substituted as a party to the action or proceeding.

"(e) After each entity has approved the plan of merger, the entities must deliver to the Secretary of State for filing a statement of merger signed on behalf of each entity as provided by its governing statute which must include:

"(1) the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger;

"(2) the name, type of entity, and mailing address of the principal office of the surviving entity, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving entity, the jurisdiction of the governing statute of the surviving entity, and, if the surviving entity is created pursuant to the merger, a statement to that effect;

"(3) for each entity other than a general partnership, the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"(4) for each general partnership, the date of the filing of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"(5) the date the merger is effective under the governing statute of the surviving entity;

"(6) if the surviving entity is to be created pursuant to the merger, (i) if it will be a filing entity, its certificate of formation; or (ii) if it will be a non-filing entity, any document that creates the entity that is required to be in a public writing or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable;

"(7) if the surviving entity is a domestic entity that exists before the merger, any amendments provided for in the plan of merger for the organizational documents that created the domestic entity that are required to be in a public writing, or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable;

"(8) a statement as to each entity that the merger was approved as required by the entity's governing statute;

"(9) a statement that a copy of the plan of merger will be furnished by the surviving entity, on request and without cost, to any owner of any entity which is a party to the merger;

"(10) if the surviving entity is a foreign entity not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-1-8.04; and

"(11) any additional information required by the governing statute of any entity that is a party to the merger.

"(f) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance subsection (e), all parties to the merger that are general partnerships, other than a general partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership.

"(g) If all of the entities that are parties to the merger are domestic entities, the merger becomes effective on the effective date determined in accordance with Article 4 of Chapter 1. If one or more parties to the merger is a foreign entity, or a foreign entity created by the merger is the surviving entity, the merger shall become effective at the later of:

"(1) when all documents required to be filed in foreign jurisdictions to effect the merger have become effective, or

"(2) the effective date determined in accordance with Article 4 of Chapter 1.

"(h) After the merger has become effective in accordance with subsection (g), then, except for (i) copies of certified statements of authority, denial, or cancellation thereof permitted to be delivered to the judge of probate for filing pursuant to Chapter 8A, (ii) any documents permitted to be delivered to the judge of probate for filing pursuant to Chapter 17, and (iii) certified copies of statements of merger or conversion permitted to be delivered to the judge of probate for filing pursuant to Chapter 1, Chapter 2A, Chapter 5A, Chapter 8A, or Chapter 9A, all filing instruments with respect to the surviving entity that would otherwise be required by this title to be delivered to the judge of probate for filing shall instead be delivered to the Secretary of State for filing.

"(i) When a merger becomes effective:

"(1) the surviving entity continues or, in the case of a surviving entity created pursuant to the merger, comes into existence;

"(2) each entity that merges into the surviving entity ceases to exist as a separate entity;

"(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each merging entity that ceases to exist vests in the surviving entity without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving entity shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

"(4) all debts, obligations and other liabilities of each merging entity, other than the surviving entity, are debts, obligations and liabilities of the surviving entity, and neither the rights of creditors, nor any liens upon the property of any entity that is a party to the merger, shall be impaired by the merger;

"(5) an action or proceeding, pending by or against any merging entity that ceases to exist continues as if the merger had not occurred and the name of the surviving entity may, but need not be substituted in any pending proceeding for the name of any merging entity whose separate existence ceased in the merger;

"(6) except as prohibited by law other than this chapter or as provided in the plan of merger, all the rights, privileges, franchises, immunities, powers, and purposes of each merging entity, other than the surviving entity, vest in the surviving entity;

"(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

"(8) except as otherwise agreed, if a merged entity ceases to exist, the merger does not dissolve the merged entity;

"(9) if the surviving entity is created pursuant to the merger:

"(i) if it is a general partnership, the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership becomes effective; or

"(ii) if it is an organization other than a partnership, the organizational documents that create the entity become effective;

"(10) the interests in a merging entity that are to be converted in accordance with the terms of the merger into interests, obligations, rights to acquire interests, cash, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former holders of interests are entitled only to the rights provided to them by those terms or to any appraisal or dissenters' rights they may have under the governing statute governing the merging entity;

"(11) if the surviving entity exists before the merger:

"(i) except as provided in the plan of merger, all the property and contract rights of the surviving entity remain its property and contract rights without transfer, reversion, or impairment;

"(ii) the surviving entity remains subject to all its debts, obligations, and other liabilities; and

"(iii) except as provided by law other than this chapter or the plan of merger, the surviving entity continues to hold all of its rights, privileges, franchises, immunities, powers and purposes.

"(5)(12) Service of process in an action or proceeding against a surviving or resulting foreign entity to enforce an obligation of a domestic entity that is a party to a merger may be made by registered mail addressed to the surviving entity at the address set forth in the certificate statement of merger or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on a domestic entity may be served on the surviving or resulting foreign entity by registered mail addressed to the surviving entity at the address set forth in the certificate statement of merger or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process.

"(6)(13)a. An owner of an entity with limited liability protection remains liable, if at all, for an obligation incurred prior to the merger by an entity that ceases to exist as a result of the merger only to the extent, if any, that the owner would have been liable under the laws applicable to owners of the form of entity that ceased to exist if the merger had not occurred.

"b. An owner with limited liability protection who, as a result of the merger, becomes an owner without limited liability protection of the surviving or resulting entity is liable for an obligation of the surviving or resulting entity incurred after merger to the extent provided for by the laws applicable to the surviving or resulting entity.

"(7)(14) An owner without limited liability protection of an entity that ceases to exist as a result of a merger and who as a result of the merger becomes an owner of a surviving or resulting entity with limited liability protection remains liable for an obligation of the entity that ceases to exist incurred before the merger takes effect only to the extent, if any, that the owner would have been liable if the merger had not occurred.

"(j) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any merged entity owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving entity's title to such real property.

§10A-1-8.04.

"(a) One or more foreign entities may merge with one or more domestic entities in accordance with Section 10A-1-8.02, and a foreign entity may convert to a domestic entity, or a domestic entity may convert to a foreign entity in accordance with Section 10A-1-8.01 only if:

"(1) The merger or conversion is permitted by the law of the state or country under whose law each foreign entity is formed and each foreign entity complies with that law in effecting the merger or conversion.

"(2) In the case of a conversion, the foreign entity complies with subsection (b) the requirements of Section 10A-1-8.01.

"(3) In the case of a merger, the foreign entity complies with subsection (g) the requirements of Section 10A-1-8.02 if it is the surviving entity of the merger.

"(b) Upon the merger or conversion taking effect, the surviving foreign entity of a merger and the foreign converted entity resulting from in a conversion is deemed:

"(1) To consent that service of process in a proceeding to enforce any obligation or any appraisal or dissenter's rights of owners of each domestic entity a party to the merger or conversion may be made by registered mail addressed to the surviving or converted entity at the address set forth in the certificate statement of merger or statement of conversion, as the case may be, or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on the domestic entity may be served on the surviving or converted foreign entity by registered mail addressed to the surviving or converted entity at the address set forth in the plan of merger or statement of conversion, as the case may be, or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process; and

"(2) To consent to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which a converting or merging entity is liable if, before the conversion or merger, the converting or merging entity was subject to suit in this state on the debt, obligation, or other liability. If the foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that foreign entity for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35; and

"(2)(3) To agree that it will promptly pay to dissenting owners with appraisal or dissenter's rights, of each domestic entity that is a party to the merger or conversion the amount, if any, to which they are entitled under Alabama law.

§10A-1-9.01.

"This article does not apply to business corporations, limited liability companies, general partnerships, and limited partnerships.

§10A-4-2.02.

"(a) Any corporation whose certificate of formation includes as a stated purpose the performance of professional services may be incorporated under this chapter by stating in its certificate of formation that it is incorporated under this chapter.

"(b) A professional business corporation, other than a nonprofit professional corporation, which is subject to this chapter shall cease being governed by this chapter and shall be governed by the Alabama Business Corporation Law, Section 10A-2-1.01 et seq., if it is a domestic corporation, if it amends its certificate of formation to delete the statement that it is organized under this chapter, and conforms its articles to the Alabama Business Corporation Law and, if it is a foreign corporation, complies with the provisions of this title applicable to foreign entities. A domestic nonprofit professional corporation which is subject to this chapter shall cease being governed by this chapter and shall be governed by the Alabama Nonprofit Corporation Law, Section 10A-3-1.01 et seq., if it is a domestic corporation, if it amends its certificate of formation to delete the statement that it is organized under this chapter, and conforms its certificate to the Alabama Nonprofit Corporation Law and, if it is a foreign corporation, complies with the provisions of this title applicable to foreign entities.

"(c) Any corporation which is not subject to this chapter may become subject to this chapter, if it is a domestic corporation, by conforming its articles to this chapter.

"(d) Any foreign professional corporation which renders professional services in Alabama shall be subject to this chapter.

§10A-4-4.01.

"Administrators, executors, guardians, conservators, or receivers of the estates of shareholders of a domestic professional corporation who hold all of the outstanding shares of the corporation may amend the certificate of formation by signing a written consent to the amendment and delivering the amendment for filing to the judge of probate of the county in which the corporation's certificate of formation was filed in accordance with Article 4 of Chapter 1. The certificate of amendment shall set forth, in addition to the information required to be included in the certificate of amendment by Sections 10A-1-3.13 and 10A-2-10.06 the Alabama Business Corporation Law, a statement that the administrators, executors, guardians, conservators, or receivers own all the outstanding shares.

§10A-4-4.02.

"(a) A domestic professional corporation may convert to or merge or consolidate with another corporation, or professional corporation, or another type of entity, domestic or foreign, under Article 11 of Chapter 2 the Alabama Business Corporation Law, or may merge with or convert to another type of entity as permitted by Article 8 of Chapter 1. Upon the merger, consolidation, or conversion, if the surviving or new corporation or converted entity, as the case may be, is to render professional services in Alabama, it shall comply with the provisions of this chapter.

"(b) An unincorporated professional association organized under Article 1 of Chapter 30 may merge or consolidate with a professional corporation organized under this chapter. In the merger, the procedure specified in Article 11 of Chapter 2 the Alabama Business Corporation Law shall apply, provided that:

"(1) The surviving corporation shall be a domestic professional corporation,

"(2) The following terms, when used in Article 11 the Alabama Business Corporation Law to refer to an unincorporated professional association, shall have the following meanings:

"a. "Board of directors" shall mean "board of governors,"

"b. "Corporation" shall mean "unincorporated association,"

"c. "Shares or securities" in the case of an unincorporated professional association which is a nonstock organization, shall mean the undivided interests of the members in the assets of the association,

"d. "Shareholder" in the case of an unincorporated association which is a nonstock organization, shall mean "member."

"(3) The plan of merger or plan of consolidation conversion shall be approved by a vote of two thirds of the members of the professional association.

§10A-4-5.01.

"The Attorney General may institute proceedings to involuntarily dissolve a domestic professional corporation under Section 10A-2-14.30, or, in the case of a domestic nonprofit professional corporation, to involuntarily dissolve it under the provisions of the Alabama Nonprofit Corporation Law. A licensing authority may request that the Attorney General institute such proceedings.

§10A-4-5.04.

"(a) Every professional corporation, domestic or foreign, which is required to file an annual report under Section 10A-2-16.22 the Alabama Business Corporation Law, and shall include in the annual report, in addition to the items required by Section 10A-2-16.22 the Alabama Business Corporation Law:

"(1) A statement that all the shareholders, at least one director, and the president of the corporation are qualified persons with respect to the corporation, and

"(2) In the case of a foreign professional corporation, the name or names of the Alabama licensed professional or professionals through whom the foreign professional corporation will render professional services in Alabama.

"(b) Financial information contained in the annual report of a professional corporation, other than the amount of stated capital of the corporation, shall not be open to public inspection nor shall the licensing authority disclose any facts or information obtained therefrom except insofar as its official duty may require the same to be made public or in the event the information is required for evidence in any criminal proceedings or in any other action by the State of Alabama.

§10A-5A-10.01.

"(a) An organization other than a limited liability company may convert to a limited liability company, and a limited liability company may convert to an organization other than a limited liability company pursuant to this section, Sections 10A-5A-10.02 through 10A-5A-10.03, and a plan of conversion, if:

"(1) the governing statute of the organization that is not a limited liability company authorizes the conversion;

"(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and

"(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.

"(b) A plan of conversion must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;

"(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in Section 10A-5A-10.01(c); and

"(4) the organizational documents of the converted organization.

"(c) In connection with a conversion, rights or securities of or interests in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-5A-10.03.

"(a) After a plan of conversion is approved:

"(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-5A-2.04(a) and which must include:

"(A) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(B) the date of the filing of the certificate of formation of the converting organization, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"(C) a statement that the converting organization has been converted into the converted organization;

"(D) the name and type of organization of the converted organization and the jurisdiction of its governing statute;

"(E) the street and mailing address of the principal office of the converted organization;

"(F) the date the conversion is effective under the governing statute of the converted organization;

"(G) a statement that the conversion was approved as required by this chapter;

"(H) a statement that the conversion was approved as required by the governing statute of the converted organization; and

"(I) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request and without cost, to any owner of the converting organization; and

"(I)(J) if the converted organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-5A-10.04(b); and

"(2) if the converted organization is a limited liability company, the converting organization shall file deliver for filing a certificate of formation in accordance with subsection (d), which certificate of formation must include, in addition to the information required by Section 10A-5A-2.01(a):

"(A) a statement that the limited liability company was converted from the converting organization;

"(B) the name and type of organization of the converting organization, and the jurisdiction of the converting organization's governing statute, and the converting organization's unique identifying number or other designation as assigned by the Secretary of State, if any; and

"(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

"(b) A conversion becomes effective:

"(1) if the converted organization is a limited liability company, when the certificate of formation takes effect; and

"(2) if the converted organization is not a limited liability company, as provided by the governing statute of the converted organization.

"(c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall file deliver for filing the statement of conversion required under subsection (a)(1) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(1).

"(d) If the converted organization is a limited liability company, then notwithstanding Section 10A-1-4.02(b), the converting organization shall file deliver for filing the certificate of formation required under subsection (a)(2) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(5), along with the fees specified in Section 10A-1-4.31 subject to subsection (f)(3).

"(e) If the converting organization is required to file deliver for filing a statement of conversion and a certificate of formation with to the Secretary of State, then the converting organization shall file deliver for filing the statement of conversion and the certificate of formation with to the Secretary of State simultaneously.

"(f) In the case of a statement of conversion that is to be filed with the Secretary of State pursuant to subsection (c):

"(1) if the converting organization has a certificate of formation filed with the judge of probate, the Secretary of State shall within 10 days transmit a certified copy of the statement of conversion to the office of the judge of probate in the county in which the certificate of formation for such converting organization was filed along with the proper fee for the judge of probate.

"(2) if the converting organization did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(3) if the converting organization, immediately prior to the conversion becoming effective, is an organization described in Section 10A-1-4.02(c)(4), but is not required under this title to file its organizational documents with the judge of probate, the Secretary of State shall not transmit a certified copy of the statement of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(g) In the case of a certificate of formation that is to be filed with the Secretary of State pursuant to subsection (d), the Secretary of State shall not transmit a certified copy of the certificate of formation to the office of the judge of probate and shall not collect any fee for the judge of probate, but shall collect the fee provided for the Secretary of State in Section 10A-1-4.31(a)(1).

"(h)(f) After a conversion becomes effective, if the converted organization is a limited liability company, then, except for certified copies of documents permitted to be delivered to the judge of probate for filing pursuant to subsection (h) all filing instruments required to be filed under this title regarding that converted organization shall be filed with the Secretary of State.

"(i)(g) If:

"(1) the converting organization is a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

"(2) the converted organization will be a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

"(3) the name of the converting organization and the converted organization are to be the same, other than words, phrases, or abbreviations indicating the type of entity; and

"(4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purpose of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization.

"(j)(h) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the converted organization's title to such real property.

"(k)(i) A statement of conversion shall be is a filing instrument under Chapter 1.

"(l)(j) Except as set forth in subsection (f)(2), the The filing fees for a statement of conversion shall be the same fee as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-5A-10.04.

"(a) When a conversion takes effect:

"(1) all property and contract rights owned by the converting organization, or series thereof, remains vested in the converted organization without reservation transfer, reversion, or impairment and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion;

"(2) all debts, obligations, or other liabilities of the converting organization, or series thereof, continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion;

"(3) an action or proceeding pending by or against the converting organization, or series thereof, continues as if the conversion had not occurred and the name of the converted entity may, but need not, be substituted for the name of the converting entity in any pending action or proceeding;

"(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization, or series thereof, remain vested in the converted organization;

"(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect;

"(6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization, and any series thereof, shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization, or series thereof;

"(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converting organization, and all series thereof, shall be the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization;

"(8) if the converted organization is a limited liability company, for all purposes of the laws of this state, the limited liability company shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a limited liability company;

"(9) if the converted organization is a limited liability company, the existence of the limited liability company shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

"(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion; and

"(11) If the Secretary of State has assigned a unique identifying number or other designation to the converting organization and (i) the converted organization is formed pursuant to, or its internal affairs are governed by, the laws of this state or (ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted organization.

"(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting limited liability company, or series thereof, is liable if, before the conversion, the converting limited liability company was subject to suit in this state on the debt, obligation, or other liability. If a converted organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-5A-10.05.

"(a) A limited liability company may merge with one or more other constituent organizations pursuant to this section, Sections 10A-5A-10.06 through 10A-5A-10.08, and a plan of merger, if:

"(1) the governing statute of each of the other organizations authorizes the merger;

"(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and

"(3) each of the other organizations complies with its governing statute in effecting the merger.

"(b) A plan of merger must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is to be created pursuant to the merger, a statement to that effect;

"(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration as allowed by subsection (c);

"(4) if the surviving organization is to be created pursuant to the merger, the surviving organization's organizational documents; and

"(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization's organizational documents.

"(c) In connection with a merger, rights or securities of or interests in a constituent organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-5A-10.07.

"(a) After each constituent organization has approved the plan of merger, a statement of merger must be signed on behalf of:

"(1) each constituent limited liability company, as provided in Section 10A-5A-2.04(a); and

"(2) each other constituent organization, as provided by its governing statute.

"(b) A statement of merger under this section must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization, and the jurisdiction of its the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, if any of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of its the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

"(3) the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which was formed under the laws of this state;

"(4) the date the merger is effective under the governing statute of the surviving organization;

"(5) if the surviving organization is to be created pursuant to the merger:

"(A) if it will be a limited liability company, the limited liability company's certificate of formation; or

"(B) if it will be an organization other than a limited liability company, any organizational document that creates the organization that is required to be in a public writing;

"(6) if the surviving organization exists before the merger, any amendments provided for in the plan of merger for the organizational document that created the organization that are required to be in a public writing;

"(7) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

"(8) a statement that a copy of the plan of merger will be furnished by the surviving organization, on request and without cost, to any owner of any constituent organization which is a party to the merger;

"(8)(9) if the surviving organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-5A-10.08(b); and

"(9)(10) any additional information required by the governing statute of any constituent organization.

"(c) The statement of merger shall be delivered for filing to the Secretary of State. in accordance with Section 10A-1-4.02(c)(1), along with the fees specified in Section 10A-1-4.31, subject to the last sentence of this subsection (c). For each constituent organization which is formed under the laws of this state and which is not, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), the Secretary of State shall within 10 days transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which is formed under the laws of this state and which is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), but which has a certificate of formation filed with the judge of probate, the Secretary of State shall transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which (1) is formed under the laws of this state, (2) is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), and (3) did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(d) A merger becomes effective under this article:

"(1) if the surviving organization is a limited liability company, upon the later of:

"(A) the filing of the statement of merger with the Secretary of State; or

"(B) as specified in the statement of merger; or

"(2) if the surviving organization is not a limited liability company, as provided by the governing statute of the surviving organization.

"(e) After a merger becomes effective, if the surviving organization is a limited liability company, then, except for certified copies of the statement of merger permitted to be delivered to the judge of probate for filing pursuant to subsection (f), all filing instruments required to be filed under this title regarding that surviving organization shall be filed delivered for filing with to the Secretary of State.

"(f) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving organization's title to such real property.

"(g) A statement of merger shall be is a filing instrument under Chapter 1.

"(h) Except as provided in the last sentence of subsection (c), the The filing fees for a statement of merger shall be the same fees as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-5A-10.08.

"(a) When a merger becomes effective:

"(1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes into existence;

"(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

"(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each constituent organization, or series thereof, that ceases to exist vests in the surviving organization without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving organization shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

"(4) all debts, obligations, and other liabilities of each constituent organization, or series thereof, other than the surviving organization, are debts, obligations, and other liabilities of the surviving organization, and neither the rights of creditors, nor any liens upon the property of any constituent organization, shall be impaired by the merger;

"(5) an action or proceeding pending by or against any constituent organization, or series thereof, continues as if the merger had not occurred and the name of the surviving organization may be, but need not be, substituted in any pending proceeding for the name of any constituent organization whose separate existence ceased in the merger;

"(6) except as prohibited by law other than this chapter, or the terms of the merger as provided in the plan of merger, all of the rights, privileges, franchise franchises, immunities, powers, and purposes of each constituent organization, or series thereof, other than the surviving organization, vest in the surviving organization;

"(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

"(8) except as otherwise agreed, if a constituent limited liability company ceases to exist, the merger does not dissolve the limited liability company and does not dissolve a series thereof;

"(9) if the surviving organization is created pursuant to the merger:

"(A) if it is a limited liability company, the certificate of formation becomes effective; or

"(B) if it is an organization other than a limited liability company, the organizational documents that create the organization become effective; and

"(10) if the surviving organization existed before the merger, any amendments provided for in the statement of merger for the organizational documents that created the of that organization become effective.;

"(11) the transferable interests of each limited liability company that is a constituent organization to the merger, and the ownership interests of each organization that is not a limited liability company, but is a constituent organization to the merger, that are to be converted in accordance with the terms of the merger into transferable interests, ownership interests, other securities, obligations, rights to acquire transferable interests, ownership interests, or other securities, cash, other property, or any combination of the foregoing, are converted, and the former holder of such transferable interests or ownership interests is entitled only to the rights provided to that former holder by those terms or the statute governing that former holder's constituent organization; and

"(12) if the surviving organization exists before the merger:

"(i) except as provided in the plan of merger, all property and contract rights of the surviving organization remain its property and contract rights without transfer, reversion, or impairment;

"(ii) the surviving organization remains subject to all its debts, obligations, and other liabilities; and

"(iii) except as provided by law other than this chapter, or the plan of merger, the surviving organization continues to hold all of its rights, privileges, franchises, immunities, powers, and purposes.

"(b) A surviving organization that is a foreign entity consents to the jurisdiction of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability. If a surviving organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then the service of process on that surviving organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-8A-9.02.

"(a) An organization other than a partnership may convert to a partnership, and a partnership may convert to an organization other than a partnership pursuant to this section, Sections 10A-8A-9.03 through 10A-8A-9.05, and a plan of conversion, if:

"(1) the governing statute of the organization that is not a partnership authorizes the conversion;

"(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and

"(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.

"(b) A plan of conversion must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;

"(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in Section 10A-8A-9.02(c); and

"(4) the organizational documents of the converted organization.

"(c) In connection with a conversion, rights or securities of or interests in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

"(d) If a partnership is the converting organization and that partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then that partnership must, before proceeding with a conversion deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

"(e) If an organization is converting to a partnership, the converting organization must deliver to the Secretary of State for filing a statement of partnership, statement of not for profit partnership, or a statement of limited liability partnership in accordance with Section 10A-8A-9.04.

§10A-8A-9.04.

"(a) After a plan of conversion is approved:

"(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-8A-2.03 and which must include:

"(A) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(B) the date of the filing of the certificate of formation of the converting organization, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"(C) a statement that the converting organization has been converted into the converted organization;

"(D) the name and type of organization of the converted organization and the jurisdiction of its governing statute;

"(E) the street and mailing address of the principal office of the converted organization;

(F) the date the conversion is effective under the governing statute of the converted organization;

"(G) a statement that the conversion was approved as required by this chapter;

"(H) a statement that the conversion was approved as required by the governing statute of the converted organization; and

"(I) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request and without cost, to any owner of the converting organization; and

"(I)(J) if the converted organization is a foreign organization not authorized to conduct business or not for profit activity in this state, the street and mailing address of an office for the purposes of Section 10A-8A-9.05(b); and

"(2) if the converted organization is a partnership, the converting organization shall deliver to the Secretary of State for filing a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, which statement of partnership, statement of not for profit partnership, or statement of limited liability partnership must include, in addition to the information required by Section 10A-8A-2.02 or 10A-8A-10.01, as applicable:

"(A) a statement that the partnership was converted from the converting organization;

"(B) the name and type of organization of the converting organization, and the jurisdiction of the converting organization's governing statute, and the converting organization's unique identifying number or other designation as assigned by the Secretary of State, if any; and

"(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

"(3) if the converting organization is a partnership and that partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then the converting organization must deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

"(b) A conversion becomes effective:

"(1) if the converted organization is a partnership, when the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership takes effect; and

"(2) if the converted organization is not a partnership, as provided by the governing statute of the converted organization.

"(c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall file deliver for filing the statement of conversion required under subsection (a)(1) and the statement, if any, required under subsection (a)(3) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(1).

"(d) If the converted organization is a partnership, then, notwithstanding Section 10A-1-4.02(b), the converting organization shall file deliver for filing a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership required under subsection (a)(2) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(5), along with the fees specified in Section 10A-1-4.31 subject to subsections (f)(3) and (f)(4).

"(e) If the converting organization is required to file deliver for filing a statement of conversion and a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership with to the Secretary of State, then the converting organization shall file deliver for filing the statement of conversion and the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership with to the Secretary of State simultaneously.

"(f) In the case of a statement of conversion that is to be filed with the Secretary of State pursuant to subsection (c):

"(1) if the converting organization has a certificate of formation filed with the judge of probate, the Secretary of State shall within 10 days transmit a certified copy of the statement of conversion to the office of the judge of probate in the county in which the certificate of formation for such converting organization was filed along with the proper fee for the judge of probate.

"(2) if the converting organization did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(3) if the converting organization is, immediately prior to the conversion becoming effective, an organization described in Section 10A-1-4.02(c)(4), but is not required under this title to file its organizational documents with the judge of probate, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(4) if the converting organization is a partnership, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(g) In the case of a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership that is to be filed with the Secretary of State pursuant to subsection (d), the Secretary of State shall not transmit a certified copy of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership to the office of the judge of probate and shall not collect any fee for the judge of probate, but shall collect the fee provided for the Secretary of State in Section 10A-1-4.31(a)(1).

"(h)(f) After a conversion becomes effective, if the converted organization is a partnership, then, except for (I) certified copies of documents permitted to be delivered to the judge of probate for filing pursuant to subsection (h) and (II) certified copies of statements of authority, denial, and cancellations thereof permitted to be delivered to the judge of probate for filing pursuant to Sections 10A-8A-3.03 and 10A-8A-3.04, all filing instruments required to be filed under this title regarding that converted organization shall be filed with the Secretary of State.

"(i)(g) If:

"(1) the converting organization is a filing entity, a partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to conduct business or not for profit activity in this state or a qualified foreign limited liability partnership;

"(2) the converted organization will be a filing entity, a partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to conduct business or not for profit activity in this state or a qualified foreign limited liability partnership;

"(3) the name of the converting organization and the converted organization are to be the same, other than words, phrases or abbreviations indicating the type of entity; and

"(4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purposes of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization.

"(j)(h) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the converted organization's title to such real property.

"(k)(i) A statement of conversion is a filing instrument under Chapter 1.

"(l)(j) Except as set forth in subsections (f)(2), (f)(3), and (f)(4), the The filing fees for a statement of conversion shall be the same fee as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-8A-9.05.

"(a) When a conversion takes effect:

"(1) all property and contract rights owned by the converting organization remains vested in the converted organization without reservation transfer, reversion, or impairment and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion;

"(2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion;

"(3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred and the name of the converted entity may, but need not, be substituted for the name of the converting entity in any pending action or proceeding;

"(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

"(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect;

"(6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization shall not be required to wind up its business or not for profit activity or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization;

"(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities and duties of the converting organization, shall be the rights, privileges, powers, interests in property, debts, liabilities and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization;

"(8) if the converted organization is a partnership, for all purposes of the laws of this state, the partnership shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a partnership;

"(9) if the converted organization is a partnership, the existence of the partnership shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

"(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion; and

"(11) If the Secretary of State has assigned a unique identifying number or other designation to the converting organization and

"(i) the converted organization is formed pursuant to, or its internal affairs are governed by, the laws of this state or

"(ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted organization.

"(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting partnership is liable if, before the conversion, the converting partnership was subject to suit in this state on the debt, obligation, or other liability. If a converted organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-8A-9.06.

"(a) A partnership may merge with one or more other constituent organizations pursuant to this section, Sections 10A-8A-9.07 through 10A-8A-9.09, and a plan of merger, if:

"(1) the governing statute of each of the other organizations authorizes the merger;

"(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and

"(3) each of the other organizations complies with its governing statute in effecting the merger.

"(b) A plan of merger must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying numbers or other designations as assigned by the Secretary of State, if any, of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is to be created pursuant to the merger, a statement to that effect;

"(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration as allowed by subsection (c);

"(4) if the surviving organization is to be created pursuant to the merger, the surviving organization's organizational documents; and

"(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization's organizational documents.

"(c) In connection with a merger, rights or securities of or interests in a constituent organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-8A-9.08.

"(a) After each constituent organization has approved the plan of merger, a statement of merger must be signed on behalf of:

"(1) each constituent partnership, as provided in Section 10A-8A-2.03(a); and

"(2) each other constituent organization, as provided by its governing statute.

"(b) A statement of merger under this section must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization and , the jurisdiction of its the governing statute of each constituent organization, and the respective unique identifying numbers or other designations as assigned by the Secretary of State, if any, of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of its the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

"(3) the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which was formed under the laws of this state;

"(4) the date of the filing of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which is a partnership;

"(5) the date the merger is effective under the governing statute of the surviving organization;

"(6) if the surviving organization is to be created pursuant to the merger:

"(A) if it will be a partnership, the partnership's statement of partnership, statement of not for profit partnership, or statement of limited liability partnership; or

"(B) if it will be an organization other than a partnership, any organizational document that creates the organization that is required to be in a public writing;

"(7) if the surviving organization exists before the merger, any amendments provided for in the plan of merger for the organizational document that are required to be in a public writing;

"(8) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

"(9) a statement that a copy of the plan of merger will be furnished by the surviving organization, on request and without cost, to any owner of any constituent organization which is a party to the merger;

"(9)(10) if the surviving organization is a foreign organization not authorized to conduct business or not for profit activity in this state, the street and mailing address of an office for the purposes of Section 10A-8A-9.09(b); and

"(10)(11) any additional information required by the governing statute of any constituent organization.

"(c) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance subsection (d), all constituent organizations that are partnerships, other than a partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership.

"(d) The statement of merger shall be delivered for filing to the Secretary of State in accordance with Section 10A-1-4.02(c)(1), along with the fees specified in Section 10A-1-4.31, subject to the last two sentences of this subsection (d). For each constituent organization which is formed under the laws of this state pursuant to a certificate of formation and which is not, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), the Secretary of State shall within 10 days transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which is formed under the laws of this state pursuant to a certificate of formation, which is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), but which has a certificate of formation filed with the judge of probate, the Secretary of State shall transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which (1) is formed under the laws of this state pursuant to a certificate of formation, (2) is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), and (3) did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate. For each constituent organization which is a partnership, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(e) A merger becomes effective under this article:

"(1) if the surviving organization is a partnership, upon the later of:

"(A) the filing of the statement of merger with the Secretary of State; or

"(B) as specified in the statement of merger; or

"(2) if the surviving organization is not a partnership, as provided by the governing statute of the surviving organization.

"(f) After a merger becomes effective, if the surviving organization is a partnership, then, except (I) the statement of merger permitted to be delivered to the judge of probate for filing pursuant to subsection (g) and (II) certified copies of statements of authority, denial, and cancellations thereof permitted to be delivered to the judge of probate for filing pursuant to Sections 10A-8A-3.03 and 10A-8A-3.04for certified copies of, all filing instruments required to be filed under this title regarding that surviving organization shall be filed delivered for filing with to the Secretary of State.

"(g) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving organization's title to such real property.

"(h) A statement of merger is a filing instrument under Chapter 1.

"(i) Except as provided in the last two sentences of subsection (d), the The filing fees for a statement of merger shall be the same fees as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-8A-9.09.

"(a) When a merger becomes effective:

"(1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes into existence;

"(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

"(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each constituent organization that ceases to exist vests in the surviving organization without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving organization shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

"(4) all debts, obligations, and other liabilities of each constituent organization, other than the surviving organization, are debts, obligations, and other liabilities of the surviving organization, and neither the rights of creditors, nor any liens upon the property of any constituent organization, shall be impaired by the merger;

"(5) an action or proceeding pending by or against any constituent organization continues as if the merger had not occurred and the name of the surviving organization may be, but need not be, substituted in any pending proceeding for the name of any constituent organization whose separate existence ceased in the merger;

"(6) except as prohibited by law other than this chapter, or the terms as provided in the plan of the merger, all of the rights, privileges, franchises, immunities, powers, and purposes of each constituent organization, other than the surviving organization, vest in the surviving organization;

"(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

"(8) except as otherwise agreed, if a constituent partnership ceases to exist, the merger does not dissolve the partnership;

"(9) if the surviving organization is created pursuant to the merger:

"(A) if it is a partnership, the statement of partnership, statement of not for profit partnership or statement of limited liability partnership becomes effective; or

"(B) if it is an organization other than a partnership, the organizational documents that create the organization become effective;

"(10) if the surviving organization existed before the merger, any amendments provided for in the statement of merger for the organizational documents of that organization become effective;

"(11) the transferable interests of each partnership that is a constituent organization to the merger, and the ownership interests of each organization that is not a partnership, but is a constituent organization to the merger, that are to be converted in accordance with the terms of the merger into transferable interests, ownership interests, other securities, obligations, rights to acquire transferable interests, ownership interests, or other securities, cash, other property, or any combination of the foregoing, are converted, and the former holder of such transferable interests or ownership interests is entitled only to the rights provided to that former holder by those terms or the statute governing that former holder's constituent organization; and

"(12) if the surviving organization exists before the merger:

"(i) except as provided in the plan of merger all the property and contract rights of the surviving organization remain its property and contract rights without transfer, reversion, or impairment;

"(ii) the surviving organization remains subject to all its debts, obligations, and other liabilities; and

"(iii) except as provided by law other than this chapter, or the plan of merger, the surviving organization continues to hold all of its rights, privileges, franchises, immunities, powers, and purposes.

"(b) A surviving organization that is a foreign entity consents to the jurisdiction of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability. If a surviving organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then the service of process on that surviving organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-9A-10.02.

"(a) An organization other than a limited partnership may convert to a limited partnership, and a limited partnership may convert to an organization other than a limited partnership pursuant to this section, Sections 10A-9A-10.03 through 10A-9A-10.05, and a plan of conversion, if:

"(1) the governing statute of the organization that is not a limited partnership authorizes the conversion;

"(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and

"(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.

"(b) A plan of conversion must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;

"(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in Section 10A-9A-10.02(c); and

"(4) the organizational documents of the converted organization.

"(c) In connection with a conversion, rights or securities of or interests in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-9A-10.04.

"(a) After a plan of conversion is approved:

"(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-9A-2.03(a) and which must include:

"(A) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

"(B) the date of the filing of the certificate of formation of the converting organization, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

"(C) a statement that the converting organization has been converted into the converted organization;

"(D) the name and type of organization of the converted organization and the jurisdiction of its governing statute;

"(E) the street and mailing address of the principal office of the converted organization;

"(F) the date the conversion is effective under the governing statute of the converted organization;

"(G) a statement that the conversion was approved as required by this chapter;

"(H) a statement that the conversion was approved as required by the governing statute of the converted organization; and

"(I) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request and without cost, to any owner of the converting organization; and

"(I)(J) if the converted organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-9A-10.05(b); and

"(2) if the converted organization is a limited partnership, the converting organization shall file deliver for filing a certificate of formation in accordance with subsection (d), which certificate of formation must include, in addition to the information required by Section 10A-9A-2.01(a):

"(A) a statement that the limited partnership was converted from the converting organization;

"(B) the name and type of organization of the converting organization and, the jurisdiction of the converting organization's governing statute, and the converting organization's unique identifying number or other designation as assigned by the Secretary of State, if any; and

"(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

"(b) A conversion becomes effective:

"(1) if the converted organization is a limited partnership, when the certificate of formation takes effect; and

"(2) if the converted organization is not a limited partnership, as provided by the governing statute of the converted organization.

"(c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall file deliver for filing the statement of conversion required under subsection (a)(1) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(1).

"(d) If the converted organization is a limited partnership, then, notwithstanding Section 10A-1-4.02(b), the converting organization shall file deliver for filing the certificate of formation required under subsection (a)(2) with to the Secretary of State in accordance with Section 10A-1-4.02(c)(5), along with the fees specified in Section 10A-1-4.31 subject to subsection (f)(3).

"(e) If the converting organization is required to file deliver for filing a statement of conversion and a certificate of formation with to the Secretary of State, then the converting organization shall file deliver for filing the statement of conversion and the certificate of formation with to the Secretary of State simultaneously.

"(f) In the case of a statement of conversion that is to be filed with the Secretary of State pursuant to subsections (c):

"(1) if the converting organization has a certificate of formation filed with the judge of probate, the Secretary of State shall within 10 days transmit a certified copy of the statement of conversion to the office of the judge of probate in the county in which the certificate of formation for such converting organization was filed along with the proper fee for the judge of probate.

"(2) if the converting organization did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(3) if the converting organization is, immediately prior to the conversion becoming effective, an organization described in Section 10A-1-4.02(c)(4), but is not required under this title to file its organizational documents with the judge of probate, the Secretary of State shall not transmit a certified copy of the statement of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(g) In the case of a certificate of formation that is to be filed with the Secretary of State pursuant to subsection (d), the Secretary of State shall not transmit a certified copy of the certificate of formation to the office of the judge of probate and shall not collect any fee for the judge of probate, but shall collect the fee provided for the Secretary of State in Section 10A-1-4.31(a)(1).

"(h)(f) After a conversion becomes effective, if the converted organization is a limited partnership, then, except for certified copies of documents permitted to be delivered to the judge of probate for filing pursuant to subsection (h), all filing instruments required to be filed under this title regarding that converted organization shall be filed with the Secretary of State.

"(i)(g) If:

"(1) the converting organization is a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

"(2) the converted organization will be a filing entity or a foreign filing entity registered to conduct activities and affairs in this state;

"(3) the name of the converting organization and the converted organization are to be the same, other than words, phrases or abbreviations indicating the type of entity; and

"(4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purpose of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization.

"(j)(h) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the converted organization's title to such real property.

"(k)(i) A statement of conversion shall be is a filing instrument under Chapter 1.

"(l)(j) Except as set forth in subsection (f)(2), the The filing fees for a statement of conversion shall be the same fee as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-9A-10.05.

"(a) When a conversion takes effect:

"(1) all property and contract rights owned by the converting organization remains vested in the converted organization without reservation transfer, reversion, or impairment and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion;

"(2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion;

"(3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred and the name of the converted entity may, but need not, be substituted for the name of the converting entity in any pending action or proceeding;

"(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

"(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect;

"(6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization;

"(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converting organization, shall be the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization;

"(8) if the converted organization is a limited partnership, for all purposes of the laws of this state, the limited partnership shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a limited partnership;

"(9) if the converted organization is a limited partnership, the existence of the limited partnership shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

"(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion; and

"(11) if the Secretary of State has assigned a unique identifying number or other designation to the converting organization and (i) the converted organization is formed pursuant to, or its internal affairs are governed by, the laws of this state or (ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted organization.

"(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting limited partnership, or series thereof, is liable if, before the conversion, the converting limited partnership was subject to suit in this state on the debt, obligation, or other liability. If a converted organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-9A-10.06.

"(a) A limited partnership may merge with one or more other constituent organizations pursuant to this section, Sections 10A-9A-10.07 through 10A-9A-10.09, and a plan of merger, if:

"(1) the governing statute of each of the other organizations authorizes the merger;

"(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and

"(3) each of the other organizations complies with its governing statute in effecting the merger.

"(b) A plan of merger must be in writing and must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying numbers or other designations as assigned by the Secretary of State, if any, of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is to be created pursuant to the merger, a statement to that effect;

"(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration as allowed by subsection (c);

"(4) if the surviving organization is to be created pursuant to the merger, the surviving organization's organizational documents; and

"(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization's organizational documents.

"(c) In connection with a merger, rights or securities of or interests in a constituent organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-9A-10.08.

"(a) After each constituent organization has approved the plan of merger, a statement of merger must be signed on behalf of:

"(1) each constituent limited partnership, as provided in Section 10A-9A-2.03(a); and

"(2) each other constituent organization, as provided by its governing statute.

"(b) A statement of merger under this section must include:

"(1) the name, type of organization, and mailing address of the principal office of each constituent organization and, the jurisdiction of its the governing statute of each constituent organization, and the respective unique identifying numbers or other designations as assigned by the Secretary of State, if any, of each constituent organization;

"(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any of the surviving organization, the jurisdiction of its the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

"(3) the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which was formed under the laws of this state;

"(4) the date the merger is effective under the governing statute of the surviving organization;

"(5) if the surviving organization is to be created pursuant to the merger:

"(A) if it will be a limited partnership, the limited partnership's certificate of formation; or

"(B) if it will be an organization other than a limited partnership, any organizational document that creates the organization that is required to be in a public writing;

"(6) if the surviving organization exists before the merger, any amendments provided for in the plan of merger for the organizational document that created the organization that are required to be in a public writing;

"(7) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

"(8) a statement that a copy of the plan of merger will be furnished by the surviving organization, on request and without cost, to any owner of any constituent organization which is a party to the merger;

"(8)(9) if the surviving organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-9A-10.09(b); and

"(9)(10) any additional information required by the governing statute of any constituent organization.

"(c) The statement of merger shall be delivered for filing to the Secretary of State in accordance with Section 10A-1-4.02(c)(1), along with the fees specified in Section 10A-1-4.31, subject to the last sentence of this subsection (c). For each constituent organization which is formed under the laws of this state and which is not, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), the Secretary of State shall within 10 days transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which is formed under the laws of this state and which is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), but which has a certificate of formation filed with the judge of probate, the Secretary of State shall transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which (1) is formed under the laws of this state, (2) is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), and (3) did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate.

"(d) A merger becomes effective under this article:

"(1) if the surviving organization is a limited partnership, upon the later of:

"(A) the filing of the statement of merger with the Secretary of State; or

"(B) as specified in the statement of merger; or

"(2) if the surviving organization is not a limited partnership, as provided by the governing statute of the surviving organization.

"(e) After a merger becomes effective, if the surviving organization is a limited partnership, then, except for certified copies of the statement of merger permitted to be delivered to the judge of probate for filing pursuant to subsection (f), all filing instruments required to be filed under this title regarding that surviving organization shall be filed delivered for filing with to the Secretary of State.

"(f) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving organization's title to such real property.

"(g) A statement of merger shall be is a filing instrument under Chapter 1.

"(h) Except as provided in the last sentence of subsection (c), the The filing fees for a statement of merger shall be the same fees as provided in Section 10A-1-4.31(a)(5) as set forth in Chapter 1.

§10A-9A-10.09.

"(a) When a merger becomes effective:

"(1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes into existence;

"(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

"(3) except as provided in the plan of merger all property owned by, and every contract right possessed by, each constituent organization that ceases to exist vests in the surviving organization without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving organization shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

"(4) all debts, obligations, and other liabilities of each constituent organization, other than the surviving organization, are debts, obligations, and other liabilities of the surviving organization, and neither the rights of creditors, nor any liens upon the property of any constituent organization, shall be impaired by the merger;

"(5) an action or proceeding pending by or against any constituent organization, or series thereof, continues as if the merger had not occurred and the name of the surviving organization may be, but need not be, substituted in any pending proceeding for the name of any constituent organization whose separate existence ceased in the merger;

"(6) except as prohibited by law other than this chapter, or the terms as provided in the plan of the merger, all of the rights, privileges, franchise franchises, immunities, powers, and purposes of each constituent organization, other than the surviving organization, vest in the surviving organization;

"(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

"(8) except as otherwise agreed, if a constituent limited partnership ceases to exist, the merger does not dissolve the limited partnership;

"(9) if the surviving organization is created pursuant to the merger:

"(A) if it is a limited partnership, the certificate of formation becomes effective; or

"(B) if it is an organization other than a limited partnership, the organizational documents that create the organization become effective; and

"(10) if the surviving organization existed before the merger, any amendments provided for in the statement of merger for the organizational documents that created the of that organization become effective;

"(11) the transferable interests of each limited partnership that is a constituent organization to the merger, and the ownership interests of each organization that is not a limited partnership, but is a constituent organization to the merger, that are to be converted in accordance with the terms of the merger into transferable interest, ownership interests, other securities, obligations, rights to acquire transferable interest, ownership interests, or other securities, cash, other property, or any combination of the foregoing, are converted, and the former holder of such transferable interests or ownership interests is entitled only to the rights provided to that former holder by those terms or the statute governing that former holder's constituent organization; and

"(12) if the surviving organization exists before the merger:

"(i) except as provided in the plan of merger, all the property and contract rights of the surviving organization remain its property and contract rights without transfer, reversion, or impairment;

"(ii) the surviving organization remains subject to all its debts, obligations, and other liabilities; and

"(iii) except as provided by law other than this chapter, or the plan of merger, the surviving organization continues to hold all of its rights, privileges, franchises, immunities, powers, and purposes.

"(b) A surviving organization that is a foreign entity consents to the jurisdiction of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability. If a surviving organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then the service of process on that surviving organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-10-1.09.

"A real estate investment trust has the power to:

"(1) Unless the declaration of trust provides otherwise, have perpetual existence unaffected by any rule against perpetuities.

"(2) Sue, be sued, complain, and defend in all courts.

"(3) Transact its business, carry on its operations, and exercise the powers granted by this chapter in any state, territory, district, or possession of the United States and in any foreign country.

"(4) Make contracts, incur liabilities, and borrow money.

"(5) Sell, mortgage, lease, pledge, exchange, convey, transfer, and otherwise dispose of all or any part of its assets.

"(6) Issue bonds, notes, and other obligations, and secure them by mortgage or deed of trust of all or any part of its assets.

"(7) Subject to Section 10A-10-1.10, acquire by purchase, or in any other manner, take, receive, own, hold, use, employ, improve, encumber, and otherwise deal with any interest in real and personal property, wherever located.

"(8) Purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of and deal with:

"a. Securities, shares, and other interests in any obligations of domestic and foreign corporations, other real estate investment trusts, associations, partnerships, and individuals.

"b. Direct and indirect obligations of the United States, any other government, state, territory, government district, and municipality, and any of their instrumentalities.

"(9) Elect or appoint trustees, officers, and agents of the trust for the period of time the declaration of trust or bylaws provide, define their duties, and determine their compensation.

"(10) Adopt and implement employee or officer benefit plans.

"(11) Make and alter bylaws not inconsistent with law or with its declaration of trust to regulate the government of the real estate investment trust and the administration of its affairs.

"(12) Exercise these powers, including the power to take, hold, and dispose of the title to real and personal property in the name of the trust or in the name of its trustees, without the filing of any bond.

"(13) Generally exercise the powers set forth in its declaration of trust which are not inconsistent with law and are appropriate to promote and attain the purposes set forth in its declaration of trust.

"(14) Indemnify or advance expenses to trustees, officers, employees, and agents of the trust to the same extent as permitted for directors, officers, employees, and agents of an Alabama corporation under Sections 10A-2-8.50 to 10A-2-8.58, inclusive the Alabama Business Corporation Law.

§10A-10-1.12.

"A shareholder has the same right to inspect the records of the real estate investment trust as a shareholder of a corporation under Section 10A-2-16.02 the Alabama Business Corporation Law.

§10A-10-1.15.

"(a) For purposes of this section, the following words shall have the respective meanings ascribed to them:

"(1) ALABAMA REAL ESTATE INVESTMENT TRUST. A real estate investment trust organized in compliance with the provisions of this chapter.

"(2) BUSINESS TRUST.

"a. An entity described in Section 10A-16-1.01.

"b. An unincorporated trust or association, including an Alabama real estate investment trust, a common-law trust, or a Massachusetts trust, which is engaged in business and in which property is acquired, held, managed, administered, controlled, invested, or disposed of for the benefit and profit of any person who may become a holder of a transferable unit of beneficial interest in the trust.

"(3) DOMESTIC LIMITED LIABILITY COMPANY. A limited liability company formed under the laws of this state.

"(4) DOMESTIC LIMITED PARTNERSHIP. A partnership formed by two or more persons under the laws of the state and having one or more general partners and one or more limited partners.

"(5) FOREIGN BUSINESS TRUST. A business trust organized under the laws of the United States, another state of the United States, or a territory, possession, or district of the United States.

"(6) FOREIGN LIMITED LIABILITY COMPANY. A limited liability company formed under the laws of any state other than the State of Alabama or under the laws of a foreign country.

"(7) FOREIGN LIMITED PARTNERSHIP. A partnership formed under the laws of any state other than the State of Alabama or under the laws of a foreign country and having as partners one or more general partners and one or more limited partners.

"(b) Unless the declaration of trust provides otherwise, an Alabama real estate investment trust may merge into an Alabama or foreign business trust, into an Alabama or foreign corporation having capital stock, or into a domestic or foreign limited partnership or limited liability company; or one or more business trusts, corporations, domestic or foreign limited partnerships, or limited liability companies may merge into an Alabama real estate investment trust.

"(c) A merger shall be approved in the manner provided by this section, except that:

"(1) A foreign business trust, an Alabama business trust, other than an Alabama real estate investment trust, a corporation, a domestic or foreign limited partnership, or a domestic or foreign limited liability company party to the merger shall have the merger advised, authorized, and approved in the manner and by the vote required by its declaration of trust, charter, or partnership agreement, and the laws of the place where it is organized.

"(2) A merger needs to be approved by an Alabama real estate investment trust successor only by a majority of its entire board of trustees if:

"a. The merger does not reclassify or change its outstanding shares or otherwise amend its declaration of trust.

"b. The number of shares to be issued or delivered in the merger is not more than 15 percent of the number of its shares of the same class or series outstanding immediately before the merger becomes effective.

"(d) The board of trustees of each Alabama real estate investment trust proposing to merge shall:

"(1) Adopt a resolution that declares the proposed transaction is advisable in substantially the terms and conditions set forth or referred to in the resolution.

"(2) Direct that the proposed transaction be submitted for consideration at either an annual or special meeting of shareholders.

"(e) Notice which states that a purpose of a meeting will be to act upon the proposed merger shall be given by each Alabama real estate investment trust in the manner provided for corporations by Chapter 2 the Alabama Business Corporation Law, to:

"(1) Each of its shareholders entitled to vote on the proposed transaction.

"(2) Each of its shareholders not entitled to vote on the proposed transaction, except the shareholders of a successor in a merger if the merger does not alter the contract rights of their shares as expressly set forth in the declaration of trust.

"(f) Except as provided in subsection (c) of Section 10A-10-1.06, the proposed merger shall be approved by the shareholders of each Alabama real estate investment trust by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter.

"(g) Articles of merger containing the information required by Section 10A-2-11.05 the Alabama Business Corporation Law, and the other provisions as permitted by that section shall be:

"(1) Executed for each party to the articles of merger in the manner required by Article 1 of Chapter 2 the Alabama Business Corporation Law.

"(2) Filed for the record in the Office of the Secretary of State in accordance with the provisions of Article 4 of Chapter 1.

"(h)(1) A proposed merger may be abandoned before the effective date of the articles of merger:

"a. If the articles of merger so provide, by majority vote of the entire board of trustees of any one business trust party to the articles or by a majority of the entire board of directors of any one corporation party to the articles.

"b. Unless the articles of merger provide otherwise by a majority vote of the entire board of trustees of each Alabama real estate investment trust party to the articles.

"c. By unanimous consent of the members of a limited liability company party to the articles of merger.

"d. By unanimous consent of the partners of a limited partnership party to the articles of merger.

"(2) If the articles of merger have been filed in the Office of the Secretary of State, notice of the abandonment shall be given promptly to the Secretary of State.

"(3)a. If the proposed merger is abandoned as provided in this subsection, no legal liability arises under the articles of merger.

"b. An abandonment does not prejudice the rights of any person under any other contract made by a business trust, corporation, limited partnership, or limited liability company party to the proposed articles of merger in connection with the proposed merger.

"c. Each shareholder of an Alabama real estate investment trust objecting to a merger of the Alabama real estate investment trust shall have the same rights as an objecting shareholder a stockholder of an Alabama corporation under Article 13 of Chapter 2A and under the same procedures.

"(i) The Secretary of State shall prepare certificates of merger that specify:

"(1) The name of each party to the articles of merger.

"(2) The name of the successor and the location of its principal office in this state or, if it has none, its principal place of business.

"(3) The time the articles of merger are accepted for record by the Secretary of State.

"(j) If the successor in a merger is an Alabama real estate investment trust, a merger is effective as of the later of:

"(1) The time the Secretary of State accepts the articles of merger for record.

"(2) The time established under the articles of merger, not to exceed 30 days after the articles are accepted for record.

"(k)(1) If the successor in a merger is a foreign corporation, a foreign limited partnership, a foreign limited liability company, or an Alabama or foreign business trust, other than an Alabama real estate investment trust, the merger is effective as of the later of:

"a. The time specified by the law of the place where the successor is organized.

"b. The time the Secretary of State accepts the articles of merger for record.

"(2) A foreign successor in a merger may file for record with the judge of probate a certificate from the place where it is organized which certifies the date the articles of merger were filed. However, the failure to file this certificate does not invalidate the merger.

"(l)(1) Consummation of a merger has the effects provided in this subsection.

"(2) The separate existence of each business trust, corporation, limited partnership, or limited liability company party to the articles of merger, except the successor, ceases.

"(3) The shares of each business trust party to the articles of merger which are to be converted or exchanged under the terms of the articles cease to exist, subject to the rights of an objecting shareholder under this section.

"(4) In addition to any other purposes and powers set forth in the articles, if the articles of merger provide, the successor has the purposes and powers of each party to the articles.

"(5)a. The assets of each party to the articles of merger, including any legacies which it would have been capable of taking, transfer to, vest in, and devolve on the successor without further act or deed.

"b. Confirmatory deeds, assignments, or similar instruments to evidence the transfer may be executed and delivered at any time in the name of the transferring party to the articles of merger by its last acting officers or trustees or by the appropriate officers or trustees of the successor.

"(6)a. The successor is liable for all the debts and obligations of each nonsurviving party to the articles of merger. An existing claim, action, or proceeding pending by or against any nonsurviving party to the articles of merger may be prosecuted to judgment as if the merger had not taken place, or, on motion of the successor or any party, the successor may be substituted as a party and the judgment against the nonsurviving party to the articles of merger constitutes a lien on the property of the successor.

"b. A merger does not impair the rights of creditors or any liens on the property of any business trust, corporation, limited partnership, or limited liability company which is a party to the articles of merger.

"(m) This section is not exclusive. Real estate investment trusts may merge or exchange their shares in any other manner provided by law, including pursuant to the provisions of Article 18 of Chapter 81.

§10A-10-1.16.

"(a) A real estate investment trust may terminate its existence by voluntary dissolution and wind up its business and affairs in the manner and on the grounds provided in Article 14 of Chapter 2 the Alabama Business Corporation Law.

"(b) A real estate investment trust may curtail or cease its trust activities by partially or completely distributing its assets.

"(c)(1) The Attorney General may institute proceedings to dissolve a real estate investment trust which has abused, misused, or failed to use its powers. The proceedings shall be brought in the manner and on the grounds provided in Article 14 of Chapter 2 of this title the Alabama Business Corporation Law, with respect to judicial dissolution of a corporation.

"(2) The venue of an action under this subsection is in a county where an officer or resident agent of the real estate investment trust is located.

§10A-11-1.01.

"This chapter and the provisions of (A) Chapter 1 and (B) Chapter 2 or Chapter 2A, as applicable, to the extent applicable to employee cooperative associations may be cited as the "Alabama Employee Cooperative Corporations Law."

§10A-11-1.03.

"Any corporation organized under Chapter 2 governed by the Alabama Business Corporation Law may elect to be governed as an employee cooperative under this chapter, by so stating in its certificate of formation or certificate of amendment filed in accordance with Chapter 2 the Alabama Business Corporation Law.

§10A-11-1.04.

"An employee cooperative may revoke its election under this chapter by a vote of two-thirds of the members and through articles of amendment filed in accordance with Chapter 2 the Alabama Business Corporation Law.

§10A-11-1.06.

"(a) The governing documents shall establish qualifications and the method of acceptance and termination of members. No person may be accepted as a member unless employed by the employee cooperative on a full-time or part-time basis. In order to qualify for membership, part-time employment shall be at least half-time.

"(b) An employee cooperative shall issue a class of voting stock designated as "membership shares." Each member shall own only one membership share, and only members may own such shares.

"(c) Membership shares shall be issued for a fee as shall be determined by the directors. An employee cooperative may allow for payment of such fee by payroll deduction, installments, or similar methods. A membership share may be issued to a person upon acceptance for membership regardless of whether the membership fee is fully paid.

"(d) Members of an employee cooperative shall have all the rights and responsibilities of stockholders of a corporation organized under Chapter 2 governed by the Alabama Business Corporation Law, except as otherwise provided in this chapter.

§10A-11-1.12.

"(a) When an employee cooperative revokes its election in accordance with Section 10A-11-1.04, the certificate of amendment shall provide for conversion of membership shares and internal capital accounts or their conversion to securities or other property in a manner consistent with Chapter 2 the Alabama Business Corporation Law.

"(b) An employee cooperative which has not revoked its election under this chapter may not consolidate or merge with another corporation other than an employee cooperative. Two or more employee cooperatives may consolidate or merge in accordance with Article 11 of Chapter 2 the Alabama Business Corporation Law.

§10A-30-2.01.

"(a) This article applies to all close corporations, as defined in Section 10A-30-2.02.

"(b) All provisions of this article shall be applicable to all close corporations as defined in Section 10A-30-2.02 except insofar as this article otherwise provides.

"(c) Neither election to become, nor operation as, a close corporation shall deprive any shareholder of such corporation of the limitation of liability provided under former Section 10-2A-43 or a successor statute, including Section 10A-2-6.22 the Alabama Business Corporation Law.

"(d) This chapter shall apply only to close corporations formed in accordance with Section 10A-30-2.03 before January 1, 1995, or electing to become a close corporation pursuant to Section 10A-30-2.04 before January 1, 1995, and which has not voluntarily terminated its status as a close corporation or otherwise ceased to be a close corporation to which the provisions of this article apply before January 1, 1995.

§10A-30-2.03.

"A close corporation shall be which was formed in accordance with former Sections 10-2A-90 through 10-2A-96, or any successor statute, including Article 2 of Chapter 2, except that such formation must be have been authorized by the affirmative vote of all holders of and subscribers to shares of the corporation, and:

"(1) The certificate of formation shall contain contains a heading stating the name of the corporation and that it is a close corporation; and

"(2) The certificate of formation shall contain contains the provisions required by Section 10A-30-2.02; and

"(3) Each certificate for shares shall conspicuously note notes the fact that the corporation is a close corporation and make reference to the restriction on transfer of shares set forth in the certificate of formation.

§10A-30-2.04.

"(a) A corporation may voluntarily terminate its status as a close corporation and cease to be subject to this article by amending its certificate of formation to delete therefrom the additional provisions required or permitted by Section 10A-30-2.02 to be stated in the certificate of formation of close corporations except such provisions as are permitted by Chapter 2 the Alabama Business Corporation Law which the corporation chooses to retain. Any such amendment shall be adopted and shall become effective in accordance with Article 10 of Chapter 2 the Alabama Business Corporation Law, except that it must be approved by a vote of the holders of record of at least one-third of the shares of each class of stock of the corporation which are outstanding.

"(b) The certificate of formation of a close corporation may provide that on any amendment to terminate its status as a close corporation, a vote greater than one-third or a vote of all shares of any class shall be required; and if the certificate of incorporation contains such a provision, that provision shall not be amended, repealed, or modified by any vote less than that required to terminate the corporation's status as a close corporation.

§10A-30-2.05.

"(a) If shares of a close corporation are issued or transferred to any person who is not entitled under any provision of the certificate of formation permitted by Section 10A-30-2.02 to be a holder of record of shares of the corporation, and if the certificate for shares conspicuously notes the qualifications of the persons entitled to be holders of record thereof, such person is conclusively presumed to have notice of the fact of his or her ineligibility to be a shareholder.

"(b) If a certificate for shares of any close corporation conspicuously notes the fact of a restriction on transfer of shares of the corporation and the restriction is one which is permitted by former Section 10-2A-41 or any successor statute, including Section 10A-2-6.27 the Alabama Business Corporation Law, the transferee of the shares is conclusively presumed to have notice of the fact that he or she has acquired shares in violation of the restriction, if such acquisition violates the restriction.

"(c) Whenever any person to whom shares of a close corporation have been issued or transferred has, or is conclusively presumed under this section to have notice either that he or she is a person not eligible to be a holder of shares of the corporation, or that the transfer of shares is in violation of a restriction on transfer of shares, the corporation may, at its option, refuse to register transfer of the shares into the name of the transferee in addition to any remedies which may be available under former Section 10-2A-41 or any successor statute, including Section 10A-2-6.27 or otherwise the Alabama Business Corporation Law.

"(d) The provisions of subsection (c) shall not be applicable if the transfer of shares even though otherwise contrary to subsections (a) or (b), has been consented to by all the shareholders of the close corporation, or if the close corporation has amended its certificate of formation in accordance with Section 10A-30-2.04.

"(e) The term "transfer," as used in this section, is not limited to a transfer for value.

"(f) The provisions of this section do not in any way impair any rights of a transferee regarding any right to rescind the transaction or to recover under any applicable warranty express or implied.

§10A-30-2.06.

"If a restriction on transfer of shares of a close corporation is held not to be authorized by former Section 10-2A-41 or any successor statute, including Section 10A-2-6.27 the Alabama Business Corporation Law, the corporation shall nevertheless have an option for a period of 30 days after the judgment setting aside the restriction becomes final, to acquire the restricted shares at a price which is agreed upon by the parties or if no agreement is reached as to price, then at the fair value as determined by the circuit court of the county in which the corporation has its registered office or any court in such place having jurisdiction. In order to determine fair value, the court may appoint an appraiser to receive evidence and report to the court his or her findings and recommendation as to fair value. The appraiser shall have such powers and shall proceed, so far as applicable, in the same manner as appraisers appointed under former Section 10-2A-163 or any successor statute, including Section 10A-2-13.30(e) Article 13 of Chapter 2A.

§10A-30-2.09.

"(a) The circuit court of the county in which the corporation has its registered office or any court in such place having jurisdiction, upon application of any shareholder, may appoint one or more persons to be custodians, and, if the corporation is insolvent, to be receivers, of any close corporation when:

"(1) Pursuant to Section 10A-30-2.08, the business and affairs of the corporation are managed by the shareholders and they are so divided that the business of the corporation is suffering or is threatened with irreparable injury and any remedy with respect to such deadlock provided in the governing documents or in any written agreement of the shareholders has failed; or

"(2) The petitioning shareholder has the right to the dissolution of the corporation under a provision of the certificate of formation permitted by Section 10A-30-2.12.

"(b) In lieu of appointing a custodian for a close corporation under this section, the court may appoint a provisional director, whose powers and status shall be as provided in Section 10A-30-2.10 if the court determines that it would be in the best interest of the corporation. The appointment shall not preclude any subsequent order of the court appointing a custodian for such corporation.

"(c) A custodian appointed under this section shall have all the powers of a receiver or custodian appointed under former Section 10-2A-196 or any successor statute, including Section 10A-2-14.32 the Alabama Business Corporation Law, but the authority of the custodian is to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the court shall otherwise order.

§10A-30-2.12.

"(a) The certificate of formation of any close corporation may include a provision granting to any shareholder, or to the holders of any specified number or percentage of shares of any class of shares, an option to have the corporation dissolved at will or upon the occurrence of any specified event or contingency. Whenever any such option to dissolve is exercised, the shareholders exercising the option shall give written notice thereof to all other shareholders. After the expiration of 30 days following the sending of the notice, the dissolution of the corporation shall proceed as if the required number of shareholders having voting power had consented in writing to dissolution of the corporation as provided by Section 10A-2-14.02 the Alabama Business Corporation Law.

"(b) If the certificate of formation as originally filed does not contain a provision authorized by subsection (a), the certificate of formation may be amended to include such provision if adopted by the affirmative vote of the holders of all the outstanding shares, whether or not entitled to vote, unless the certificate of formation specifically authorizes such an amendment by a vote which shall be not less than two-thirds of all the outstanding shares whether or not entitled to vote.

"(c) Each certificate for shares in any corporation whose certificate of formation authorizes dissolution as permitted by this section shall conspicuously note on the face thereof the existence of the provision. Unless noted conspicuously on the face of the certificate for shares the provision is ineffective.

§10A-30-2.13.

"This article shall not be deemed to repeal any statute or rule of law which is or would be applicable to any corporation which is organized under the provisions of Chapter 2 governed by the Alabama Business Corporation Law but is not a close corporation."

Section 3. All laws or parts of laws which conflict with this act are repealed. Chapter 2 of Title 10A, consisting of Sections 10A-2-1.01 to 10A-2-17.02, inclusive, Code of Alabama 1975, is repealed effective January 1, 2021.

Section 4. This act shall become effective January 1, 2020, following its passage and approval by the Governor, or its otherwise becoming law.


Business and Commerce
Business Corporation Law
Code Added
Code Amended
Code Repealed