N.D. Cent. Code § 10-19.1-65

10-19.1-65. Pre-emptive rights

1. Unless denied or limited in the articles or by the board pursuant to subdivision b of

subsection 2 of section 10-19.1-61, a shareholder of a corporation has the pre-emptive

rights provided in this section.

2. A pre-emptive right is the right of a shareholder to acquire a certain fraction of the

unissued securities or rights to purchase securities of a corporation before the

corporation may offer them to other persons.

3. A shareholder has a pre-emptive right whenever the corporation proposes to issue

new or additional shares or rights to purchase shares of the same class or series as

the series held by the shareholder or, if a class of shares has no series, the same

class as the class held by the shareholder, new or additional securities other than

shares, or rights to purchase securities other than shares, that are exchangeable for,

convertible into, or carry a right to acquire new or additional shares of the same class

or series as those held by the shareholder or, if a class of shares has no series, the

same class as the class held by the shareholder.

4. Unless otherwise provided in the articles, a shareholder does not have a pre-emptive

right pursuant to this section to acquire securities or rights to purchase securities that

are:

a. Issued for a consideration other than money;

b. Issued pursuant to a plan of merger or exchange;

c. Issued pursuant to an employee or incentive benefit plan approved at a meeting

by the affirmative vote of the holders of a majority of the voting power of all

shares entitled to vote;

d. Issued upon exercise of previously issued rights to purchase securities of the

corporation;

e. Issued pursuant to a public offering of the corporation's securities or rights to

purchase securities. For purposes of this subdivision, "public offering" means an

offering of the corporation's securities or rights to purchase securities if the resale

or other distribution of those securities or rights to purchase securities is not

restricted by either state or federal securities laws; or

f. Issued pursuant to a plan of reorganization approved by a court of competent

jurisdiction pursuant to a statute of this state or of the United States.

5. The fraction of the new issue that each shareholder may acquire by exercise of a

pre-emptive right is the ratio that the number of shares of that class or series owned by

the shareholder before the new issue bears to the total number of shares of that class

or series issued and outstanding before the new issue.

6. A shareholder may waive a pre-emptive right in writing. The waiver is binding upon the

shareholder whether or not consideration has been given for the waiver. Unless

otherwise provided in the waiver, a waiver of pre-emptive rights is effective only for the

proposed issuance described in the waiver.

7. When proposing the issuance of securities with respect to which shareholders have

pre-emptive rights under this section, the board shall cause notice to be given to each

shareholder entitled to pre-emptive rights. The notice must be given at least ten days

before the date by which the shareholder must exercise a pre-emptive right and must

contain:

a. The number or amount of securities with respect to which the shareholder has a

pre-emptive right and the method used to determine that number or amount;

b. The price and other terms and conditions upon which the shareholder may

purchase them; and

c. The time within which and the method by which the shareholder must exercise

the right.

8. Securities that are subject to pre-emptive rights but not acquired by shareholders in

the exercise of those rights may, for a period not exceeding one year after the date

fixed by the board for the exercise of those pre-emptive rights, be issued to persons

the board determines, at a price not less than, and on terms no more favorable to the
by which the shareholder must exercise

the right.

8. Securities that are subject to pre-emptive rights but not acquired by shareholders in

the exercise of those rights may, for a period not exceeding one year after the date

fixed by the board for the exercise of those pre-emptive rights, be issued to persons

the board determines, at a price not less than, and on terms no more favorable to the

purchaser than, those offered to the shareholders. Securities that are not issued

during that one-year period shall, at the expiration of the period, again become subject

to pre-emptive rights of shareholders.

9. If the shareholders of a corporation are entitled to cumulative voting in the election of

directors, no amendment to the articles which has the effect of denying, limiting, or

modifying the pre-emptive rights provided in this section may be adopted if the votes of

a proportion of the voting power sufficient to elect a director at an election of the entire

board under cumulative voting are cast against the amendment.

10. A denial or limitation of pre-emptive rights otherwise provided under this section does

not limit the power of the corporation to grant first refusal rights or other rights to

purchase from the corporation shares or other securities of the corporation to

shareholders, subscribers, or other persons before the shares or other securities are

offered to or acquired by any other person.