Section 10-2B-12.02 Sale of assets other than in regular course of business.
Section 10-2B-12.02
Sale of assets other than in regular course of business.
(a) Subject to the limitations of the Constitution of Alabama of 1901 as the same may be amended from time to time, a corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property (with or without the good will), otherwise than in the usual and regular course of business on the terms and conditions and for the consideration determined by the corporation's board of directors, if the board of directors proposes and its shareholders approve the proposed transaction.
(b) For a transaction to be authorized:
(1) The board of directors must recommend the proposed transaction to the shareholders unless the board of directors determines that because of a conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the submission of the proposed transaction; and
(2) The shareholders entitled to vote must approve the transaction.
(c) Subject to the corporation's articles of incorporation, the board of directors may condition its submission of the proposed transaction on any basis, except that the board of directors may not decrease the vote required for approval under subsection (e).
(d) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with Section 10-2B-7.05. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, the property of the corporation and contain or be accompanied by a description of the transaction.
(e) Unless the articles of incorporation require a greater or lesser vote or a vote by voting groups, or the board of directors (acting pursuant to subsection (c)) requires a greater vote or a vote by voting groups, the transaction to be authorized must be approved by each voting group entitled to vote separately on the transaction by two thirds of all the votes entitled to be cast on the transaction by that voting group; but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast on the transaction by each voting group.
(f) After a sale, lease, exchange, or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights) without further shareholder action.
(g) A transaction that constitutes a distribution is governed by Section 10-2B-6.40 and not by this section.
(Acts 1994, No. 94-245, p. 343, §1.)