In Oregon, a Proposed Amendment to articles of incorporation regarding preemptive rights is a significant change that companies seek to incorporate into their legal structure. Preemptive rights refer to the rights of existing shareholders to maintain their proportional ownership stake in a company by having the first opportunity to purchase additional shares of stock if the company decides to issue new shares. The Oregon Proposed Amendment aims to provide clarity and specifications regarding preemptive rights within a company's articles of incorporation, which is a critical legal document that outlines fundamental information about the business. By incorporating preemptive rights into the articles of incorporation, the company sets guidelines for how new shares should be offered to existing shareholders before being made available to the public or other potential investors. Additionally, the Oregon Proposed Amendment can encompass different types of preemptive rights: 1. Full Preemptive Rights: This type of preemptive right grants existing shareholders the privilege to purchase additional shares in proportion to their current ownership percentage. For example, if a shareholder owns 5% of the company, they have the right to purchase 5% of the newly issued shares before external parties can acquire them. 2. Limited Preemptive Rights: In some cases, companies may choose to provide limited preemptive rights to certain classes of shareholders. This means that only specific groups of shareholders, such as preferred shareholders or a subset of common shareholders, are granted the right to purchase new shares, while excluding others. The terms and conditions for limited preemptive rights can be specified in the Proposed Amendment. 3. Waiving Preemptive Rights: Companies can choose to completely waive preemptive rights by including specific provisions in the Proposed Amendment. This means that shareholders relinquish their rights to purchase new shares in proportion to their ownership and forego any opportunity to maintain their current ownership percentage. Overall, the Oregon Proposed Amendment to articles of incorporation regarding preemptive rights plays a crucial role in maintaining fairness and transparency within a company's ownership structure. By providing shareholders with preemptive rights, companies can preserve the proportional distribution of ownership, ensuring that existing shareholders have the first opportunity to invest in the company's growth and avoid dilution of their ownership stake.