§ 7-5.2-4 - Approval of acquisitions.
SECTION 7-5.2-4
§ 7-5.2-4 Approval of acquisitions. –(a) Notwithstanding anything contained in this chapter to the contrary, exceptthe provisions of § 7-5.2-5, no resident domestic corporation shall engagein any business combination with any interested shareholder of the residentdomestic corporation for a period of five (5) years following the interestedshareholder's stock acquisition date unless the business combination or thepurchase of stock made by the interested shareholder on the interestedshareholder's stock acquisition date is approved by the board of directors ofthe resident domestic corporation prior to the interested shareholder's stockacquisition date.
(b) Notwithstanding anything contained in this chapter to thecontrary, except the provisions of subsection (a) and § 7-5.2-5, noresident domestic corporation shall engage at any time in any businesscombination with any interested shareholder of the resident domesticcorporation other than a business combination specified in any one ofsubsections (b)(1), (b)(2), or (b)(3):
(1) A business combination approved by the board of directorsof the resident domestic corporation prior to the interested shareholder'sstock acquisition date, or where the purchase of stock made by the interestedshareholder on the interested shareholder's stock acquisition date had beenapproved by the board of directors of the resident domestic corporation priorto the interested shareholder's stock acquisition date.
(2) A business combination approved by the affirmative voteof the holders of two-thirds ( 2/3) of the outstanding voting stock notbeneficially owned by the interested shareholder or any affiliate or associateof the interested shareholder at a meeting called for that purpose no earlierthan five (5) years after the interested shareholder's stock acquisition date.
(3) A business combination that meets all of the followingconditions:
(i) The aggregate amount of the cash and the market value asof the consummation date of consideration other than cash to be received pershare by holders of outstanding shares of common stock of the resident domesticcorporation in the business combination is at least equal to the higher of thefollowing:
(A) The highest per share price paid by the interestedshareholder at a time when he or she was the beneficial owner, directly orindirectly, of five percent (5%) or more of the outstanding voting stock of theresident domestic corporation, for any shares of common stock of the same classor series acquired by it within the five (5) year period immediately prior tothe announcement date concerning the business combination, or within the five(5) year period immediately prior to, or in, the transaction in which theinterested shareholder became an interested shareholder, whichever is higher;plus, in either case, interest compounded annually from the earliest date onwhich the highest per share acquisition price was paid through the consummationdate at the rate for one year United States treasury obligations from time totime in effect less the aggregate amount of any cash dividends paid, and themarket value of any dividends paid other than in cash, per share of commonstock since the earliest date, up to the amount of the interest; and
(B) The market value per share of common stock on theannouncement date with respect to the business combination or on the interestedshareholder's stock acquisition date, whichever is higher, plus interestcompounded annually from the date through the consummation date at the rate forone year United States treasury obligations from time to time in effect; lessthe aggregate amount of any cash dividends paid, and the market value of anydividends paid other than in cash, per share of common stock since the date, upto the amount of the interest.
(ii) The aggregate amount of the cash and the market value asof the consummation date of consideration other than cash to be received pershare by holders of outstanding shares of any class or series of stock, otherthan common stock, of the resident domestic corporation is at least equal tothe highest of the following, whether or not the interested shareholder haspreviously acquired any shares of the class or series of stock:
(A) The highest per share price paid by the interestedshareholder at a time when he or she was the beneficial owner, directly orindirectly, of five percent (5%) or more of the outstanding voting stock of theresident domestic corporation, for any shares of the class or series of stockacquired by it within the five (5) year period immediately prior to theannouncement date with respect to the business combination, or within the five(5) year period immediately prior to, or in, the transaction in which theinterested shareholder became an interested shareholder, whichever is higher;plus, in either case, interest compounded annually from the earliest date onwhich the highest per share acquisition price was paid through the consummationdate at the rate for one year United States treasury obligations from time totime in effect; less the aggregate amount of any cash dividend paid, and themarket value of any dividends paid other than in cash, per share of the classor series of stock since the earliest date, up to the amount of the interest;
(B) The highest preferential amount per share to which theholders of shares of the class or series of stock are entitled in the event ofany voluntary liquidation, dissolution, or winding up of the resident domesticcorporation, plus the aggregate amount of any dividends declared or due towhich the holders are entitled prior to payment of dividends on some otherclass or series of stock (unless the aggregate amount of the dividends isincluded in the preferential amount); and
(C) The market value per share of the class or series ofstock on the announcement date with respect to the business combination or onthe interested shareholder's stock acquisition date, whichever is higher; plusinterest compounded annually from the date through the consummation date at therate for one year United States treasury obligations from time to time ineffect; less the aggregate amount of any cash dividends paid, and the marketvalue of any dividends paid other than in cash, per share of the class orseries of stock since the date, up to the amount of the interest.
(iii) The consideration to be received by holders of aparticular class or series of outstanding stock, including common stock, of theresident domestic corporation in the business combination is in cash or in thesame form as the interested shareholder has used to acquire the largest numberof shares of the class or series of stock previously acquired by it, and theconsideration shall be distributed promptly.
(iv) The holders of all outstanding shares of stock of theresident domestic corporation not beneficially owned by the interestedshareholder immediately prior to the consummation of the business combinationare entitled to receive in the business combination cash or other considerationfor the shares in compliance with subsections (b)(3)(i) through (b)(3)(iii).
(v) After the interested shareholder's stock acquisition dateand prior to the consummation date of the business combination, the interestedshareholder has not become the beneficial owner of any additional shares ofvoting stock of the resident domestic corporation except:
(A) As part of the transaction which resulted in theinterested shareholder becoming an interested shareholder;
(B) By virtue of proportionate stock splits, stock dividends,or other distributions of stock in respect of stock not constituting a businesscombination under § 7-5.2-3(5)(E);
(C) Through a business combination meeting all of theconditions of this section; or
(D) Through purchase by the interested shareholder at anyprice which, if the price had been paid in an otherwise permissible businesscombination the announcement date and consummation date of which were the dateof the purchase, would have satisfied the requirements of subsections (b)(3)(i)through (b)(3)(iii) of this section.