a. If a corporation acquires its own shares, then any of the acquired shares that
are not pledged by the corporation as security for the future payment of some or all
of the purchase price for the shares constitute authorized but unissued shares of
the corporation, unless the articles provide that they may not be reissued. If the articles prohibit reissue, the number of authorized shares is reduced by
the number of shares acquired.
b. If a corporation pledges acquired shares as security for future payment of all
or part of the purchase price for the shares and reissues the pledged shares in its
own name, then:
(1) The shares must continue to be issued and outstanding except for voting and determination
of a quorum, and the shares are not considered to be present and entitled to vote
at any meeting of shareholders;
(2) The corporation may not vote or exercise any other rights of a shareholder with
respect to the pledged shares, but the pledgee shall have any rights, other than the
right to vote, with respect to the shares which the pledgee is entitled to by contract;
(3) If the pledge is foreclosed, the corporation shall reissue and deliver the pledged
shares to or at the direction of the pledgee; and
(4) Shares that are released from a pledge have the status specified in subdivision
2. If the number of authorized shares of a corporation is reduced by an acquisition
of its shares, the corporation shall, no later than the time it makes its next annual
report to shareholders or, if no report is made, no later than three months after
the end of the fiscal year in which the acquisition occurs, file with the secretary
of state a statement of cancellation showing the reduction in the authorized shares. The statement must contain:
a. The name of the corporation;
b. The number of acquired shares canceled, itemized by classes and series; and
c. The aggregate number of authorized shares itemized by classes and series, after
giving effect to the cancellation.
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