§ 5005. Transferable rights to purchase shares; imposition of
restrictions or conditions thereon. 1. Except as otherwise provided in
this section or in the organization certificate, a corporation may
create and issue, whether or not in connection with the issue and sale
of any of its capital notes, debentures or shares, rights or options
entitling the holders thereof to purchase from the corporation, upon
such consideration, terms and conditions as may be fixed by the board,
shares of any class or series, whether authorized but unissued shares,
treasury shares or shares to be purchased or acquired.

2. (a) In the case of a corporation that has a class of voting stock
registered pursuant to section twelve of the Exchange Act, the terms and
conditions of such rights or options may include, without limitation,
restrictions or conditions that preclude or limit the exercise, transfer
or receipt of such rights or options by an interested shareholder or any
transferee of any such interested shareholder or that invalidate or void
such rights or options held by any such interested shareholder or any
such transferee. For the purposes of this subdivision, the terms "voting
stock", "Exchange Act" and "interested shareholder" shall have the same
respective meanings as are set forth in section nine hundred twelve of
the business corporation law except that for this purpose references in
said section of the business corporation law to a "resident business
corporation" shall be read instead to refer to a "corporation" as
defined by section one thousand one of this chapter.

(b) Determinations of the board of directors whether to impose,
enforce or waive or otherwise render ineffective such limitations or
conditions as are permitted by paragraph (a) of this subdivision shall
be subject to judicial review in an appropriate proceeding in which the
courts formulate or apply appropriate standards in order to insure that
such limitations or conditions are imposed, enforced or waived in the
best long-term interests and short-term interests of the corporation and
its stockholders considering, without limitation, the prospects for
potential growth, development, productivity and profitability of the
corporation.

3. The consideration for shares to be purchased under any such right
or option shall comply with the requirements of section five thousand
four of this chapter.

4. The terms and conditions of such rights or options, including the
time or times at or within which and the price or prices at which they
may be exercised and any limitations upon transferability, shall be set
forth or incorporated by reference in the instrument or instruments
evidencing such rights or options.

5. If there is shareholder approval for the issue of rights and
options, such approval may provide that the board is authorized by
certificate of amendment under section eight thousand five of this
chapter to increase the authorized shares of any class or series to such
number as will be sufficient, when added to the previously authorized
but unissued shares of such class or series, to satisfy any such rights
or options entitling the holders thereof to purchase from the
corporation authorized but unissued shares of such class or series.

6. In the absence of fraud in the transaction, the judgment of the
board shall be conclusive as to the adequacy of the consideration,
tangible or intangible, received or to be received by the corporation
for the issue of rights or options for the purchase from the corporation
of its shares.

7. The provisions of this section are inapplicable to the rights of
the holders of convertible shares, capital notes or debentures to
acquire shares upon the exercise of conversion privileges under section
five thousand sixteen of this chapter.

8. The provisions of this section are inapplicable to the rights of
officers, directors and employees of a corporation who have been issued
options to purchase authorized and unissued shares of its capital stock
under or by reference to section one hundred forty-a of this chapter.