2006 Minnesota Statutes

302A.402 SHARE DIVIDENDS, DIVISIONS, AND COMBINATIONS.
    Subdivision 1. Power to effect. A corporation may effect a share dividend or a division or
combination of its shares as provided in this section.
    Subd. 2. When shareholder approval required; filing of articles of amendment. (a)
Articles of amendment must be adopted by the board and the shareholders under section
302A.135 and, if required, section 302A.137 to effect a division or combination if, as a result of
the proposed division or combination:
(1) the rights or preferences of the holders of outstanding shares of any class or series will be
adversely affected; or
(2) the percentage of authorized shares of any class or series remaining unissued after the
division or combination will exceed the percentage of authorized shares of that class or series that
were unissued before the division or combination.
(b) If a division or combination is effected under this subdivision, articles of amendment
must be prepared that contain the information required by section 302A.139.
    Subd. 3. By action of board alone; filing of articles of amendment. (a) Subject to the
restrictions provided in subdivision 2 or any provision in the articles that states that section
302A.402, subdivision 3, does not apply, a share dividend, division, or combination may be
effected by action of the board alone, without the approval of shareholders under sections
302A.135 and 302A.137. In effecting a division or combination under this subdivision, the board
may amend the articles to increase or decrease the par value of shares, increase or decrease the
number of authorized shares, and make any other change necessary or appropriate to assure that
the rights or preferences of the holders of outstanding shares of any class or series will not be
adversely affected by the division or combination.
(b) If a division or combination that includes an amendment of the articles is effected under
this subdivision, then articles of amendment must be prepared that contain the information
required by section 302A.139 and a statement that the amendment will not adversely affect the
rights or preferences of the holders of outstanding shares of any class or series and will not
result in the percentage of authorized shares of any class or series that remains unissued after the
division or combination exceeding the percentage of authorized shares of that class or series that
were unissued before the division or combination.
    Subd. 4. Changes in voting rights; fractional shares. For purposes of this section, an
increase or decrease in the relative voting rights of the shares that are the subject of the division or
combination that arises solely from the increase or decrease in the number of shares outstanding
is not an adverse effect on the outstanding shares of any class or series and any increase in
the percentage of authorized shares remaining unissued arising solely from the elimination of
fractional shares under section 302A.423 must be disregarded.
History: 1991 c 49 s 5; 1992 c 603 s 1; 1993 c 17 s 24-26; 1997 c 10 art 1 s 12; 1999 c
85 art 1 s 6; 2004 c 199 art 14 s 13