Chapter 18 - Wyoming Management Stability Act
CHAPTER 18 - WYOMING MANAGEMENT STABILITY ACT
ARTICLE 1 - GENERAL PROVISIONS
17-18-101. Short title.
Thisact shall be known and may be cited as the "Wyoming Management StabilityAct".
17-18-102. Definitions.
(a) The definitions used in the Wyoming Business CorporationsAct (W.S. 17-16-101 through 17-16-1810) shall apply to this act unlessinconsistent with the definitions in this section.
(b) As used in this act:
(i) "Affiliate" means a person that directly, orindirectly through one (1) or more intermediaries, controls, or is controlledby, or is under common control with, another person;
(ii) "Associate," when used to indicate a relationshipwith any person, means:
(A) Any entity of which the person is a director, officer orpartner or is, directly or indirectly, the owner of ten percent (10%) or moreof any class of voting stock or similar securities of the entity;
(B) Any trust or other estate in which the person has at leasta ten percent (10%) beneficial interest or as to which such person serves astrustee or in a similar fiduciary capacity; or
(C) Any relative or spouse of the person, or any relative ofthe spouse, who has the same residence as the person or who is a director orofficer of the person or any of its affiliates.
(iii) "Beneficial owner of a security" means any personwho, directly or indirectly, has the power to vote or direct the voting of allor part of the voting rights of the security, or has the power to dispose of ordirect the disposition of the security;
(iv) "Business combination," when used in reference toany corporation and any interested stockholder of that corporation, means:
(A) Any merger, consolidation or share exchange of thecorporation or any subsidiary with:
(I) The interested stockholder;
(II) A foreign or domestic corporation that is, or after themerger, consolidation or share exchange would be, an affiliate or associate ofthe interested stockholder; or
(III) Another corporation, if the merger, consolidation or shareexchange is caused by an interested stockholder, and as a result of the merger,consolidation or share exchange any section of this act does not apply to thesurviving corporation.
(B) Any sale, lease, exchange, mortgage, pledge, transfer orother disposition, in one (1) transaction or a series of transactions, exceptproportionately as a stockholder of the corporation, to or with the interestedstockholder or any affiliate or associate of the interested stockholder,whether as part of a dissolution or otherwise, of assets of the corporation orof any subsidiary which assets:
(I) Have an aggregate market value equal to ten percent (10%)or more of either the aggregate market value of all the assets of the corporationdetermined on a consolidated basis or the aggregate market value of all theoutstanding stock of the corporation;
(II) Have an aggregate book value equal to ten percent (10%) ormore of either the aggregate book value of all the assets of the corporationdetermined on a consolidated basis or of the aggregate stockholders equity ofthe corporation; or
(III) Represent ten percent (10%) or more of the earning power ornet income, determined on a consolidated basis, of the corporation.
(C) Any transaction or series of transactions which results inthe issuance or transfer by the corporation, or by any subsidiary, of any stockof the corporation or of the subsidiary to the interested stockholder except:
(I) Any transaction pursuant to the exercise, exchange orconversion of securities into stock of the corporation or any subsidiary, whichsecurities before the stockholder became an interested stockholder wereoutstanding and exercisable for or convertible into the stock; or
(II) Any of the following transactions provided there is noincrease in the interested stockholder's proportionate share of thecorporation's stock of any class or series or of the corporation's votingstock:
(1) Pursuant to a distribution made, or theexercise, exchange or conversion of securities into stock of the corporation orany subsidiary of securities distributed, pro rata to all holders of a class orseries of stock of the corporation, after the stockholder became an interestedstockholder;
(2) Pursuant to an exchange offer by thecorporation to purchase stock made on the same terms to all holders of thestock; or
(3) Any issuance or transfer of stock by thecorporation.
(D) Any transaction involving the corporation or any subsidiarywhich has the effect, directly or indirectly, of increasing the proportionateshare of the corporation's or a subsidiary's stock of any class or series, orsecurities convertible into the stock of any class or series, owned by theinterested stockholder, except as a result of immaterial changes due tofractional share adjustments or as a result of any purchase or redemption ofany shares of stock not caused, directly or indirectly, by the interestedstockholder;
(E) Any receipt by the interested stockholder of the benefit,directly or indirectly, except proportionately as a stockholder of thecorporation, of any loans, advances, guarantees, pledges or other financialassistance, or a tax credit or other tax advantage, other than those expresslypermitted in subparagraphs (A) through (D) of this paragraph, provided by orthrough the corporation or any subsidiary; or
(F) The adoption of a plan or a proposal for the liquidationand dissolution of the corporation proposed by, or pursuant to an agreement,arrangement, or understanding, whether or not in writing, with an interestedstockholder or an affiliate or associate of the interested stockholder.
(v) "Control," including the term"controlling," "controlled by" and "under commoncontrol with," means the possession, directly or indirectly, of the powerto direct or cause the direction of the management and policies of a person,whether through the ownership of voting stock, by contract or otherwise. Aperson who is the owner of ten percent (10%) or more of an entity's outstandingvoting stock or similar interests shall be presumed to have control of theentity, in the absence of proof by a preponderance of the evidence to thecontrary. A presumption of control shall not apply where the person holdsvoting stock or similar interests, in good faith and not for the purpose ofcircumventing this act, as an agent, bank, broker, nominee, custodian ortrustee for one (1) or more owners who do not individually or as a group havecontrol of the other person;
(vi) "Equity security" means:
(A) Any share or similar security carrying, at the time of thetakeover offer, the right to vote on any matter by virtue of the articles ofincorporation, bylaws, or governing instrument of the target company or theright to vote for directors or persons performing substantially similarfunctions by operation of law;
(B) Any security convertible into a security described insubparagraph (A) of this paragraph or any warrant or right to purchase thatsecurity; or
(C) Any other security which, for the protection of investors,is an equity security pursuant to regulation of the secretary of state.
(vii) "Interested stockholder":
(A) Means any person and the affiliates and associates of theperson, other than the corporation and any subsidiary, that:
(I) Is the owner of fifteen percent (15%) or more of theoutstanding voting stock of the corporation; or
(II) Is an affiliate or associate of the corporation and was theowner of fifteen percent (15%) or more of the outstanding voting stock of thecorporation at any time within the three (3) year period immediately before itis to be determined whether the person is an interested stockholder.
(B) But does not mean:
(I) Any person who:
(1) Owned shares in excess of the fifteenpercent (15%) limitation as of January 1, 1990, acquired shares pursuant to atender offer commenced prior to January 1, 1989, or owned shares pursuant to anexchange offer announced prior to January 1, 1989 and commenced within ninety(90) days; and
(2) Continued to own shares in excess of thefifteen percent (15%) limitation or would have but for action by thecorporation.
(II) Any person who acquired the shares from a person describedin subdivision (B)(I) of this paragraph by gift, inheritance or in a transactionin which no consideration was exchanged; or
(III) Any person whose ownership of shares in excess of thefifteen percent (15%) limitation is the result of action taken solely by thecorporation provided that the person shall be an interested stockholder if,after the corporate action, he acquires additional voting stock of thecorporation, except as a result of further corporate action not caused,directly or indirectly, by that person.
(viii) "Large publicly traded corporation" means acorporation which had assets at the end of its most recent fiscal year of atleast ten million dollars ($10,000,000.00) according to generally acceptedaccounting principles and which:
(A) Has a class of voting stock listed on a national securitiesexchange;
(B) Has a class of voting stock authorized for quotation on aninter dealer quotation system of a registered national securities association;or
(C) Has a class of voting stock held of record by more than onethousand (1,000) stockholders.
(ix) "Offeree" means a record or beneficial owner ofequity securities of the class which an offeror acquires or offers to acquirein connection with a takeover offer;
(x) "Offeror" means a person who makes or in any wayparticipates in making a takeover offer. The term includes all affiliates ofthat person and all persons who act jointly or in concert with that person forthe purpose of acquiring, holding or disposing of, or exercising any votingrights attached to, the equity securities of a target company. It alsoincludes the target company with respect to acquisitions of its own equitysecurities and with respect to periods of time when it is controlled by orunder common control with the offeror. It does not include a financialinstitution or broker-dealer loaning funds or extending credit to any offerorin the ordinary course of its business, or any accountant, attorney, financialinstitution, broker-dealer, newspaper or magazine of general circulation,consultant, or other person furnishing information, services, or advice to orperforming ministerial or administrative duties for an offeror and nototherwise participating in the takeover offer;
(xi) "Owner" including the terms "own" and"owned" when used with respect to any stock means a person thatindividually or with or through any of its affiliates or associates:
(A) Beneficially owns the stock, directly or indirectly;
(B) Has the right to acquire the stock, whether the right isexercisable immediately or only after the passage of time, pursuant to anyagreement, arrangement or understanding, or upon the exercise of conversionrights, exchange rights, warrants or options, or otherwise. A person shall notbe deemed the owner of stock tendered pursuant to a tender or exchange offermade by that person or any of that person's affiliates or associates until thetendered stock is accepted for purchase or exchange;
(C) Has the right to vote the stock pursuant to any agreement,arrangement or understanding. A person shall not be deemed the owner of anystock because of the person's right to vote the stock if the agreement,arrangement or understanding to vote the stock arises solely from a revocableproxy or consent given in response to a proxy or consent solicitation made toten (10) or more persons; or
(D) Has any agreement, arrangement or understanding for thepurpose of acquiring, holding, voting, except voting pursuant to a revocableproxy or consent as described in subparagraph (C) of this paragraph, ordisposing of that stock with any other person that beneficially owns, or whoseaffiliates or associates beneficially own, directly or indirectly, that stock.
(xii) "Qualified corporation" means any large publiclytraded corporation, incorporated in Wyoming, and which has substantial businessoperations within Wyoming;
(xiii) "Stockholder" means "shareholder" asdefined by W.S. 17-16-140(a)(xxxix);
(xiv) "Subsidiary" means a corporation or other personof which a majority of the outstanding voting stock or similar securities areowned, directly or indirectly, by the corporation;
(xv) "Substantial business operations within the state ofWyoming" means:
(A) At least ten percent (10%) of the corporation's full-timepermanent employees are employed within the state;
(B) At least one hundred (100) full-time permanent employeesare employed within the state;
(C) At least ten million dollars ($10,000,000.00) in fairmarket value of the corporation's assets are deposited within Wyoming financialinstitutions;
(D) The principal operating headquarters and the primaryoffices of the chief executive officer are within Wyoming; or
(E) The corporation has a combination of assets depositedwithin Wyoming financial institutions, assets assessed for ad valorem taxationwithin Wyoming, and assets within Wyoming not subject to ad valorem taxationwhich are sufficient to cause the corporation to pay the tax required by W.S.17-16-1630(a). The payment of the tax required by W.S. 17-16-1630(a) shall bedeemed conclusive evidence of substantial business operations within Wyoming.
(xvi) "Substantially equivalent terms" means termsunder which the fair market value of the consideration offered any offeree of aclass of equity securities of the target company, determined on a per share ora per unit basis, are equal to the highest consideration offered in connectionwith a takeover offer to any other offeree of that class, determined on a pershare or per unit basis;
(xvii) "Takeover offer" means an offer to acquire or anacquisition of any equity security of a target company pursuant to a tenderoffer or request or invitation for tenders, if, after the acquisition, theofferor is or will be directly or indirectly a record or beneficial owner ofmore than ten percent (10%) of any class of the outstanding equity securitiesof the target company;
(xviii) "Target company" means a qualified corporationother than:
(A) A financial institution subject to regulation by the statebanking commissioner, if the takeover offer is subject to approval by the statebanking commissioner;
(B) A corporation subject to regulation by the public servicecommission, if the takeover offer is subject to approval of the public servicecommission; or
(C) A public utility, public utility holding company, bank holdingcompany, or savings and loan association subject to regulation by a federalagency if the takeover offer is subject to the approval by that federal agency.
(xix) "Voting stock" means:
(A) For purposes other than determining whether a person is aninterested stockholder, stock of any class or series entitled to vote generallyin the election of directors;
(B) For purposes of determining whether a person is aninterested stockholder, stock deemed to be owned by the person but shall notinclude any other unissued stock of the corporation which may be issuablepursuant to any agreement, arrangement or understanding, or upon exercise ofconversion rights, warrants or options, or otherwise.
(xx) "This act" means W.S. 17-18-101 through 17-18-403.
(c) For the purpose of determining whether a person is aninterested stockholder as defined in paragraph (b)(vii) of this section, thenumber of voting stock of the corporation considered outstanding includes stockconsidered owned by that person, but does not include other unissued votingstock of the qualified corporation that may be issuable pursuant to anagreement, arrangement or understanding, or upon exercise of conversion rights,warrants or options, or otherwise.
17-18-103. Requirements to choose options.
(a) Any qualified corporation may elect to exercise or not toexercise any of the options set forth in articles 1 and 2 of this act. Noelections for an option shall be made if the corporation does not meet thecriteria of a qualified corporation at the time of the election. Any electionsmade under articles 1 and 2 of this act may be terminated in the same manner asthe elections are made subject to the restrictions of this act.
(b) If a corporation ceases to have substantial businessoperations within Wyoming, any election made under articles 1 and 2 of thisact shall be null and void until the substantial business operations arerestored and maintained for at least ninety (90) days. If the corporationterminates substantial business operations in Wyoming for the purpose ofterminating an election under articles 1 and 2 of this act, the election shallremain in effect. If a corporation terminates substantial business operationswithin Wyoming for the purpose of voiding the restrictions on businesscombinations with interested stockholders provided by W.S. 17-18-104, therestrictions shall remain in effect.
(c) If a corporation ceases to be a qualified corporationbecause it is no longer a large publicly traded corporation due to insufficientassets required by the definition provided in W.S. 17-18-102(b)(viii), at theend of a fiscal year any election made under articles 1 and 2 of this act andthe requirements of W.S. 17-18-104 and article 3 of this act shall be null andvoid sixty (60) days after the end of the following fiscal year unlesssufficient assets are again present at the end of that fiscal year.
(d) If a corporation ceases to be a qualified corporationbecause it is no longer a large publicly traded corporation due to failure tomeet the class of voting stock requirements required by the definition providedin W.S. 17-18-102(b)(viii), the corporation shall continue to be subject toW.S. 17-18-104 and article 3 of this act for five (5) years and any electionmade under articles 1 and 2 of this act prior to the failure to meet thecriteria shall be null and void five (5) years from the date of the failure tomeet the criteria. If the criteria are again met the election shall becomeeffective and the corporation shall continue to be subject to W.S. 17-18-104.
17-18-104. Option; restrictions on business combinations.
(a) Every qualified corporation is subject to the restrictionson business combinations with interested stockholders provided in this sectionunless the corporation elects not to be subject to the restrictions. Acorporation which is not a qualified corporation may elect not to be subject tothe restrictions on business combinations in the event it becomes a qualifiedcorporation. The election shall be made either:
(i) Through a specific provision in the articles ofincorporation;
(ii) Through a statement in the bylaws that the corporationelects not to be subject to the restrictions in W.S. 17-18-104(b). Thiselection shall be effective immediately upon adoption of the bylaws, unless thearticles of incorporation provide otherwise; or
(iii) By filing a statement making the election with thesecretary of state. This election shall be authorized by the corporation'sboard of directors and shall be effective from the date of filing with thesecretary of state.
(b) A qualified corporation shall not, directly or indirectly,enter into or engage in any business combination with any interestedstockholder or any affiliate or associate of the interested stockholder for aperiod of three (3) years after the date the stockholder became an interestedstockholder, unless:
(i) Prior to the time the stockholder became an interestedstockholder, the board of directors of the corporation approved either thebusiness combination or the transaction which resulted in the stockholderbecoming an interested stockholder; or
(ii) Repealed by Laws 1990, ch. 62, 2,3.
(iii) On or after the time the stockholder became an interestedstockholder, the business combination is approved by the board of directors andauthorized at an annual or special meeting of stockholders, and not by writtenconsent, by the affirmative vote of at least two-thirds (2/3) of theoutstanding voting stock which is not owned by the interested stockholder.
(c) The restrictions contained in this section shall not applyif:
(i) A stockholder becomes an interested stockholderinadvertently and as soon as practical divests sufficient stocks so that heceases to be an interested stockholder, and would not, at any time within thethree (3) year period immediately before a business combination between thecorporation and the stockholder, have been an interested stockholder but forthe inadvertent acquisition;
(ii) Repealed by Laws 1990, ch. 62, 2,3.
(d) The election not to be subject to the restrictions onbusiness combinations may be revoked in the same manner as the elections aremade. With respect to any interested stockholder the election not to besubject to the restrictions shall not be effective for a period of three (3)years after the date that the stockholder became an interested stockholder.
17-18-105. Option; shareholder takeover protection provisions.
(a) Any qualified corporation is subject to the shareholder takeoverprotection provisions listed in W.S. 17-18-105 through 17-18-111 unless thecorporation elects not to be subject to the restrictions. A corporation whichis not a qualified corporation may elect not to be subject to the shareholdertakeover provisions in the event it becomes a qualified corporation. Theelection shall be made either:
(i) Through a specific provision in the articles ofincorporation;
(ii) Through a statement in the bylaws that the corporationelects not to be subject to the restrictions in W.S. 17-18-105 through17-18-111. This election shall be effective immediately upon adoption of thebylaws, unless the articles of incorporation provide otherwise; or
(iii) By filing a statement making the election with thesecretary of state. This election shall be authorized by the corporation'sboard of directors and shall be effective from the date of filing with thesecretary of state.
(b) If a takeover offer is outstanding and in progress at thetime the election becomes effective, all further acquisition of stock by theofferor shall cease until the offer is in compliance with the stockholdertakeover protection provision of W.S. 17-18-105 through 17-18-111. The offerormay take any steps necessary to comply with these provisions before theelection becomes effective.
(c) The election not to be subject to the shareholder takeoverprovisions of W.S. 17-18-105 through 17-18-111 may be revoked by the samemethod employed under subsection (a) of this section for making the election.
17-18-106. Statement; consent to service of process; filing fee; copyto target company.
(a) The offeror, before making a takeover offer, shall filewith the secretary of state a statement in compliance with subsection (b) ofthis section and a consent to service of process. The offeror shall pay afiling fee of seven hundred fifty dollars ($750.00) and shall, not later thanthe filing date of the statement, deliver a copy of the statement to the targetcompany at its principal office and, if different, to its Wyoming registeredagent for service of process.
(b) If a takeover offer is subject to any federal law, thestatement shall be one (1) copy of each document required to be filed with thesecurities and exchange commission and any other federal agency. If thetakeover offer is not subject to any requirement of federal law, the statementshall be filed on forms prescribed by the secretary of state and shall containthe following information:
(i) The identity of and material information concerning theofferor, including:
(A) If the offeror is a corporation, information concerning itsorganization, including the year and jurisdiction of its organization, adescription of each class of its capital stock and long-term debt, adescription of the business done by the offeror and its affiliates and anymaterial changes of its business during the past three (3) years, a descriptionof the location and character of the principal properties of the offeror andits affiliates, a description of any material pending legal or administrativeproceedings in which the offeror or any of its affiliates is a party, the namesof all directors and executive officers of the offeror and their materialbusiness activities and affiliations during the past three (3) years, andaudited financial statements of the offeror and its affiliates for its three(3) most recent annual accounting periods and interim financial statements forany current period;
(B) If the offeror is not a corporation, information concerningthe person's background, including his material business activities andaffiliations during the past three (3) years, and a description of any materialpending legal or administrative proceeding in which he is a party.
(ii) The source and amount of funds or other consideration usedor to be used in acquiring any equity security, including a statementdescribing any securities which are being offered in exchange for the equitysecurities of the target company, and, if any part of the acquisition price isor will be represented by borrowed funds or other consideration, a descriptionof the transaction and the names of all the parties;
(iii) If the purpose of the acquisition is to gain control of thetarget company, a statement of any plans or proposals or negotiations withrespect to the acquisition which the offeror has upon gaining control toliquidate the target company, sell its assets, effect its merger orconsolidation, or make any other major change in its business, corporatestructure, management or personnel;
(iv) The number of shares or units of any equity security of thetarget company of which each offeror is the record or beneficial owner or whichthe offeror has a right to acquire, directly or indirectly;
(v) Information as to any contracts, arrangements,understandings or negotiations with any person concerning any equity securityof the target company, including transfers of any equity security, jointventures, loan or option arrangements, puts and calls, guarantees of loan,guarantees against loss, guarantees of profits, division of losses or profits,or the giving or withholding of proxies, naming the persons with whom thosecontracts, arrangements or understandings have been entered;
(vi) Information as to any contracts, arrangements, understandingsor negotiations, with any person who is an officer, director, administrator,manager, executive employee, or record or beneficial owner of equity securitiesof the target company with respect to the tender of any equity securities ofthe target company, the purchase by the offeror of any equity securities ownedby that person otherwise than pursuant to the takeover offer, the retention ofany person in his present position or in any other management position or withrespect to that person giving or withholding a favorable recommendation to thetakeover offer;
(vii) A description of the provisions made or to be made forproviding all material information concerning the takeover offer to theofferees, including a description of the proposed takeover offer in the formproposed to be published or sent to the offerees initially disclosing thetakeover offer; and
(viii) Any other information which the secretary of stateprescribes by regulation.
17-18-107. Takeover offers; substantially equivalent terms to allofferees of same class.
Notakeover offer shall be made which is not made to all offerees holding the sameclass of equity securities of the target company on substantially equivalentterms. A takeover offer to purchase less than all equity securities of thesame class of the outstanding equity securities of the target company is notconsidered as having been made to all offerees of that class on substantiallyequivalent terms if the pro rata portion of equity securities of that class tenderedby any offeree which will be accepted by the offeror is not equal to thehighest pro rata portion of equity securities of that class tendered by anyother offeree which will be accepted by the offeror. A takeover offerpermitting offerees to elect to receive one (1) or more differing kinds ofconsideration is not considered as having been made to all offerees holding thesame class of equity securities of the target company on substantiallyequivalent terms if proration occurs and the pro rata share of any one (1) ormore differing kinds of consideration which is allocable to any offeree is notequal to the highest pro rata share allocable to any other offeree.
17-18-108. Waiting period after offer; no purchase or payment inviolation of order.
Nostock shall be contracted for, purchased or paid for pursuant to a takeoveroffer within the first twenty (20) business days after the offer is made. Noshares shall be purchased or paid for in violation of any order of thesecretary of state.
17-18-109. Waiting period after takeover; no acquisitions of equitysecurities of target company.
Noofferor may acquire in any manner any equity security of any class of a targetcompany at any time within two (2) years following the conclusion of a takeoveroffer with respect to that class, including but not limited to acquisitionsmade by purchase, exchange, merger, consolidation, partial or completeliquidation, redemption, reverse stock split, and any other recapitalization orreorganization, unless the holder of that equity security is also afforded, atthe time of that acquisition, a reasonable opportunity to dispose of thatsecurity to the offeror upon substantially equivalent terms. If a takeoveroffer is made or concluded while the election to be subject to the shareholdertakeover protection provisions is in effect, the requirement of this sectionshall remain in effect for two (2) years following the conclusion of thetakeover offer even if the election is subsequently terminated.
17-18-110. Takeover offer; untrue statements or omission of materialfacts unlawful.
Inconnection with any takeover offer, or any solicitation of offerees inopposition to or in favor of any takeover offer, it is unlawful for any personto make any untrue statement of a material fact or to omit to state anymaterial fact necessary in order to make the statements made, in the light ofthe circumstances under which they are made, not misleading, or to engage inany fraudulent, deceptive or manipulative acts or practices.
17-18-111. Exemptions to takeover requirements; burden of establishingentitlement.
(a) Even if a corporation has elected to be subject to theprovisions of W.S. 17-18-106 through 17-18-110 do not apply to the following:
(i) An acquisition by an offeror, if the instant transactionand all acquisitions of equity securities of the same class during thepreceding twelve (12) months by the offeror or any of its affiliates do notexceed two percent (2%) of that class; or
(ii) An acquisition determined by order of the secretary ofstate to be a takeover offer that is not made for the purpose of, and nothaving the effect of, changing or influencing the control of a target company.
(b) An order may only be adopted under paragraph (a)(ii) ofthis section after a hearing pursuant to W.S. 17-18-113.
(c) The burden of establishing entitlement to any exemption ison the offeror.
17-18-112. Administration; regulations; rulemaking authority;individual liability of state officers or employees prohibited.
(a) This act shall be administered by the secretary of state ofWyoming.
(b) The secretary of state may promulgate reasonable rules andregulations necessary to carry out the purposes of this act.
(c) Neither the secretary of state, nor any of his employees,shall be liable in their individual capacity, except to the state of Wyoming,for any act done or omitted in connection with the performance of theirrespective duties under the provisions of this act.
17-18-113. Hearing; order of secretary of state prohibiting orconditioning purchase.
(a) Whenever it appears to the secretary of state that anyperson has acted or is about to act in a manner constituting a violation of anyprovision of this act or any rule or regulation adopted pursuant to this act,the secretary of state shall call a hearing to investigate the matter. Anyinterested person may petition the secretary of state for a hearing if thatperson reasonably believes a violation of W.S. 17-18-105 through 17-18-111 hasor is about to occur, or for purposes of W.S. 17-18-111(b).
(b) At least five (5) days notice that a hearing will be heldunder this section shall be given to the target company, the offeror, and otherpersons as the secretary of state may designate.
(c) The expenses, including the cost of transcripts and allexpenses of the state, of all hearings held under this section shall be borneby the offeror. As security for the payment of these expenses, the offerorshall file with the secretary of state an acceptable bond or other deposit inan amount to be determined by the secretary of state.
(d) The target company, the offeror, any offeree, and any otherperson whose interests may be affected have the right to appear at any hearingheld pursuant to this section, and to become a party to the proceeding. Anyperson appearing at or party to the hearing has the rights granted in theWyoming Administrative Procedure Act.
(e) If the secretary of state finds by a preponderance of theevidence that the takeover statement fails to provide full and fair disclosureto the offerees of all material information concerning the takeover offer orthat the takeover offer is not made to all offerees of the same class of equitysecurities of the target company on substantially equivalent terms, he shall byorder prohibit the purchase of shares tendered in response to the takeoveroffer or condition purchase upon changes or modifications.
(f) In the case of a takeover offer subject to the approval ofthe insurance commissioner, the offeror within five (5) days after thestatement is filed shall mail a notice to all offerees of the target companyadvising them of the general terms and conditions of the takeover offer and thedate of the hearing at which they may appear. No shares shall be contractedfor, purchased or paid for until after approval by both the secretary of stateand the insurance commissioner. All expenses of notifying the offerees shallbe paid by the offeror.
17-18-114. Remedies of secretary of state, offerors, target companiesand equity security owners for violations of law.
(a) Whenever it appears to the secretary of state that anyperson has engaged or is about to engage in any act or practice constituting aviolation of any provision of this act or any rule or regulation or orderadopted under this act, the secretary of state may investigate and issue ordersand notices, including temporary ex parte cease and desist orders withoutnotice. In addition to all other remedies, he may bring an action in any districtcourt in the name and on behalf of the state of Wyoming against any person orpersons participating in or about to participate in a violation of this act toenjoin those persons from continuing or doing any act in violation of this actor to enforce compliance with this act. In any court proceedings the WyomingRules of Civil Procedure shall apply.
(b) Whenever it is reasonably believed that any person hasengaged or is about to engage in any act or practice constituting a violationof this act or any regulation or order adopted under this act, the offeror,target company or any record or beneficial owner of an equity security of thetarget company may bring an action in the district court of the county wherethe target company has its principal office or Natrona county to enjoin thatperson from continuing or doing any act in violation of this act or to enforcecompliance with this act.
(c) Upon a proper showing, the court may grant a permanent orpreliminary injunction or temporary restraining order or may order rescissionof any sales, tenders for sale, purchases or tenders for purchase of equitysecurities determined to be unlawful under this act or any rule or regulationor order of the secretary of state. The court shall not require the secretaryof state to post a bond.
17-18-115. Judicial review.
Anappeal may be taken by any offeror, target company, or other party to anyproceeding before the secretary of state from any final order of the secretaryof state by filing a petition for review within thirty (30) days after entry ofthe final order complained of pursuant to the provisions of the WyomingAdministrative Procedure Act (W.S. 16-3-101 through 16-3-115).
17-18-116. Proxies.
(a) Any qualified corporation may in its articles of incorporationrestrict or prohibit the use of proxies to vote shares. The restriction orprohibition may be effective for:
(i) All meetings;
(ii) All meetings and issues with any specific exceptions theboard of directors authorizes; or
(iii) Any meetings or any issues or both that the board ofdirectors specifies.
(b) The restriction or prohibitions on the use of proxies applyonly to meetings including adjournments of meetings held within the state ofWyoming.
(c) Notwithstanding any prohibition or restriction on the useof proxies, the beneficial owner of any shares entitled to vote shall always beentitled to vote the shares in person. If the beneficial owner of the sharesis a minor or is incompetent, the shares may be voted in person by a trustee, aguardian, or a parent acting as trustee under the Wyoming Uniform Transfers toMinors Act or a similar act. If the beneficial owner of the shares is anentity other than a natural person, the shares may be voted by any dulyauthorized officer of that entity.
(d) Any restrictions imposed on persons who may be appointed toact as proxies shall not discriminate on their face in favor of management andagainst any shareholders opposed to management.
(e) The board may restrict appointment as proxies to specificindividuals designated by the corporation provided:
(i) Shareholders are given the opportunity to give bindinginstructions as to how the shares are to be voted on any issues or in anyelections that management is aware of at least thirty (30) days before it mailsmaterials seeking proxies;
(ii) The corporation serves notice in writing on any shareholderwho has requested in writing the notice within the past year of the deadlinefor submission of material on any issue that may arise at the meeting. Thenotice shall be given at least ten (10) days before the deadline;
(iii) The individuals designated for appointment as proxies agreeto vote all valid proxies according to the shareholder instructions given; and
(iv) A meeting may not be adjourned sine die to prevent a voteon an issue if a quorum is present and the required majority either by proxy orin person has had an opportunity to indicate and has indicated an intention tovote against the recommendation of the board or management of the corporationon that issue.
(f) If the articles of incorporation permit the board to imposerestrictions on the use of proxies and a court orders a shareholder's meeting,the board may still impose the restrictions provided if it does so within ten(10) days of the meeting or within half the total number of days between thedate of the court order and the date of the meeting, whichever is less. Thetime periods for notice of issues and mailing deadlines set forth in subsection(e) of this section shall not apply to court ordered meetings.
17-18-117. Voting indirectly owned shares.
EffectiveJanuary 1, 1990, notwithstanding W.S. 17-16-721(b) a qualified corporation mayelect to allow the voting of shares which are owned directly or indirectly by asecond corporation, a majority of whose shares entitled to vote for directorsof the second corporation are owned by the first corporation. The electionshall be made in the articles of incorporation as amended. The number of suchshares that may be voted is limited to forty percent (40%) of the total sharesof that class outstanding.
17-18-118. Shareholder lists.
(a) Notwithstanding W.S. 17-16-720 a qualified corporation inits bylaws may restrict access to the shareholder's list to a period beginningtwo (2) days after the notice of the meeting for which the list was prepared orten (10) days before the date of the meeting whichever is less.
(b) A qualified corporation in its bylaws may deny shareholdersthe right to copy the list of shareholders prior to the meeting provided that:
(i) Arrangements are made for an independent firm to provide toshareholders any information any stockholder wants to send them relative to thematters to be considered at the meeting provided the stockholder pays for themailing and provides the material in a timely fashion; and
(ii) The list is made available at the shareholder's expense toany shareholder at or after the meeting who is bringing a legal challenge tothe right of any other shareholder to vote at the meeting; and
(iii) The list is available for inspection but not copying asprovided by subsection (a) of this section and at the meeting. The making ofhandwritten copies by the shareholder or his attorney of the names andaddresses of individual shareholders shall not be construed as copying withinthe meaning of this subsection.
(c) A qualified corporation may take any other steps it deemsreasonable or necessary to prevent the use of its shareholder lists forpurposes not related to issues under consideration at a shareholder meeting.
17-18-119. Special meeting request exceptions.
(a) Notwithstanding W.S. 17-16-702 and 17-16-703 a qualifiedcorporation may in its bylaws:
(i) Set a higher percentage of shares not to exceed fiftypercent (50%) that must petition in order to call a special meeting than isprovided by W.S. 17-16-702;
(ii) Provide a longer period between the receipt of the requestfor a special meeting and the date that notice of the meeting is given than isallowed by W.S. 17-16-703(a)(ii)(A);
(iii) Give the board discretion to require that the issues forwhich a special meeting is requested be considered instead at the next annualmeeting if the request for the special meeting is made within a number of daysof the annual meeting specified in the bylaws.
17-18-120. Annual meeting purposes.
Inaddition to the limitations on the matters that may be considered at annualmeetings otherwise allowed by statute a qualified corporation may in its bylawsauthorize the board to further limit the matters which an annual meeting mayconsider. The limitations shall not include elimination of the election ofdirectors whose terms expire at the annual meeting. The limitations may takethe form of excluding specified matters from consideration, allowingconsideration of only certain specified matters, or requiring advance notice ofthe consideration of certain matters.
17-18-121. Action by less than a quorum.
(a) Stockholders present or represented by proxy at an annualor special meeting of a qualified corporation at which a quorum is not presentmay take only the following actions:
(i) Ratify or reject the independent auditors selected by theboard if the corporation's bylaws or articles of incorporation require approvalof the auditors by a stockholder's meeting;
(ii) With the consent of the officer presiding at the meeting,receive or hear any reports on the affairs of the corporation that may bepresented;
(iii) Within the constraints of the time allowed on the agenda,ask questions concerning the affairs of the corporation of any officer or boardmember present;
(iv) Adjourn or recess the meeting to allow time to assemble aquorum, but they may not adjourn or recess to a different city and the total ofall the adjournments and recesses may not exceed two (2) business days withoutthe consent of the board of directors;
(v) If a quorum is not present, may adjourn the meeting sinedie, provided the motion to adjourn sine die shall not be in order until atleast two (2) hours have passed since the time specified for the start of themeeting and the time at which the meeting was called to order.
(b) If an annual meeting of a qualified corporation isadjourned sine die without achieving a quorum, the requirement of W.S.17-16-701 to hold an annual meeting is satisfied. The board of directors maycall a second annual meeting to take the place of the one adjourned without aquorum, but the board is not obligated to do so unless required to do so by thebylaws or articles of incorporation.
(c) If a special meeting of a qualified corporation isadjourned sine die without achieving a quorum or without achieving the quorumnecessary to do all or part of the business for which the meeting was required,the board of directors may call another special meeting, but is not obligatedto do so unless required by the bylaws or articles of incorporation. Theremedy of a stockholder aggrieved by a failure of the board to call anotherspecial meeting shall be to follow the procedures necessary for calling a newspecial meeting.
(d) If different quorums are required for different matters,the absence of a quorum on one (1) issue shall not affect the ability of themeeting to act on other issues where a quorum is present.
ARTICLE 2 - BONDHOLDER PROTECTION PROVISIONS
17-18-201. Protection provisions; applicability; defined.
(a) A qualified corporation may, if its articles ofincorporation authorize it to utilize the bondholder protection provisions ofthis act, utilize any of the provisions set forth in subsection (b) of thissection. These protections shall apply only to bonds, debentures or other debtinstruments whose original aggregate value at maturity is equal to or greaterthan five million dollars ($5,000,000.00) and whose original term is two (2)years or greater. Any number of bondholder protection provisions may be ineffect at any time.
(b) A qualified corporation may provide bondholder protectionby requiring any or all of the following:
(i) Bondholder approval of the replacement of more thantwenty-four percent (24%) of the directors in any twelve (12) month period. The filling of vacancies created by the death or resignation of directors shallnot be counted against the twenty-four percent (24%) limit provided that thosevacancies are filled by nominees of the board of directors. If more thantwenty-four percent (24%) of the directors are to be replaced, the approval ofholders of a majority of the bonds shall be obtained in writing at the meetingwhere the directors are to be replaced or no more than thirty (30) days priorto the meeting. The consent of the bondholders shall be obtained to exceedingthe twenty-four percent (24%) limit rather than to the individual directors tobe replaced. If consent is denied, which directors are to be replaced shall bedetermined by the relative number of votes for each director by shares entitledto vote;
(ii) Bondholder consent to any merger or acquisition which thecorporation may be subject to or which the corporation may make, subject to thefollowing:
(A) The notice of bondholder protection shall specify the sizeof merger or acquisition at or above which the bondholder consent is required. The size may vary depending on whether the company is the acquiring party or isbeing acquired. In a merger the relative memberships on the board of directorsof the surviving corporation may be used to determine whether or not bondholderconsent is required;
(B) The term acquisition shall be deemed to include thepurchase of more than a specified percentage of the shares entitled to vote fordirectors by a person or combination of persons under common ownership orcontrol or acting in concert. If a person or combination of persons acquiresmore than the specified percentage of shares, they shall be entitled to voteonly the specified percentage until bondholder consent is acquired. Thespecified percentage shall be set in the notice of bondholder protection andshall not be less than ten percent (10%);
(C) The bondholder consent shall be to a specific merger oracquisition rather than the general concept of mergers and acquisitions.
(iii) Bondholder consent to the sale or disposal of certainassets, or assets exceeding a certain percentage of the corporation's totalassets, or assets exceeding a set total value or any combination of thesefactors. The specifics of what requires bondholder consent shall be set forthin the notice of bondholder protection. Disposal of assets shall be construedto include the disposition of the assets to the shareholders either directly orthrough distribution of shares in a new or subsidiary corporation;
(iv) Bondholder consent to the acquisition of debt above aspecified percentage of total assets, a specified percentage of the net worthof the corporation, a specific amount, or any combination of these factors. The consent may be required generally or may be required only if the debt is tobe used to pay for a merger or acquisition or a distribution to shareholders. The notice of bondholder protection shall specify the conditions under whichbondholder consent is required.
17-18-202. Bondholder protection provision; adoption requirements;revocation.
(a) The corporation utilizes a bondholder protection provisionby adopting and filing with the secretary of state a notice of bondholderprotection as provided in this section.
(b) The notice of bondholder protection shall specify thepercentage of bondholders whose consent is required for any action on that protection. The percentage may be different for different purposes. The percentage shallbe not less than fifty percent (50%) nor greater than ninety percent (90%). The percentage shall be a percentage of the value at maturity of the bonds orother debt instruments issued and outstanding.
(c) Notices of bondholder protection shall be approved by thecorporation in the same manner as changes in corporate bylaws except that thearticles of incorporation may specify a different manner of approval. The noticesshall be filed with the trustee or transfer agent, if any, for the bonds andwith the secretary of state. The notice filed with the secretary of stateshall be accompanied by the administrative fee specified by regulation torecover the administrative costs of the state of Wyoming. The notice shall beeffective as of the date of filing with the secretary of state. Thecorporation shall send to each known bondholder by first class mail either thefull notice of bondholder protection or a summary of the notice and informationas to how the full notice may be obtained from the company. This notice to thebondholders shall be given no later than the due date of the first interestpayment due more than thirty (30) days after the bondholder protection noticeis filed with the secretary of state and may be included with the mailing ofthe interest payment.
(d) Bondholder protections may be revoked by the corporation inthe same manner that notices of bondholder protection are issued and filedexcept that the revocation is effective as of a date specified in the noticefiled with the secretary of state. The effective date shall be at least two(2) years and not more than six (6) years after filing the notice of revocationwith the secretary of state.
17-18-203. Bondholder protection provision; amendments.
(a) At any time any amendment may be made to the bondholderprotection provisions with the consent of the percentage of bondholdersrequired for action as stated in the notice of bondholder protection. Such anamendment shall be effective upon filing the bondholder's consent and notice ofamendment with the secretary of state. However, the effective date shall bespecified in the notice and shall be at least two (2) years and not more thansix (6) years after filing the bondholder's consent and notice of the amendmentwith the secretary of state for amendments which:
(i) Change the time period for revocations to be effective;
(ii) Decrease the percentage of bondholders required forapproval of an action;
(iii) Eliminate the requirement of bondholder approval for aspecific action; or
(iv) Otherwise decrease the protection available to bondholders.
(b) The bondholder's consent shall be in writing signed by thebondholder or his lawful agent or trustee. Unless otherwise specified in W.S.17-18-201 through 17-18-206 the consent is valid until revoked by thebondholder. The sale of the bond or debt instrument by the bondholder revokesthe consent effective upon notification of the corporation or transfer agent ofthe sale.
17-18-204. Limitations of the bondholder protection provisions.
(a) Nothing in the bondholder protection provisions shall beconstrued or applied to abridge or prohibit any contract, covenant orrestriction made between any corporation and its bondholders, or any holder ofany other debt instrument provided the contract, covenant or restriction wouldbe lawful in the absence of W.S. 17-18-201 through 17-18-206. Unlessspecifically prohibited by prior contract any eligible corporation may extendto the holders of any bond or debt instrument described in W.S. 17-18-201(a)the opportunity to receive any bondholder protection provisions. If acorporation represents to potential purchasers of bonds in any prospectus or otherwritten advice to potential purchasers that it has extended or intends toextend any bondholder protection provisions, it shall also state in the samedocument that the protections may be revoked as provided by W.S. 17-18-201through 17-18-206.
(b) Protections under W.S. 17-18-201 through 17-18-206 shall beextended uniformly to all holders of the same class of bond or debt instrumentbut need not be extended uniformly to all classes of bonds or debt instruments.
17-18-205. Bondholder definition.
Theterm bondholder shall include the owners of any debt instrument to whichbondholder protections are extended.
17-18-206. Additional bondholder protection provisions allowed.
Anyother bondholder protection provisions may be provided in the notice ofbondholder protection, and shall be valid unless inconsistent with theprovisions of W.S. 17-18-201 through 17-18-206 or other law.
ARTICLE 3 - CONTROL SHARE ACQUISITIONS
17-18-301. Definitions.
(a) As used in this article:
(i) "Acquiring person" means a person who makes orproposes to make a control share acquisition. If two (2) or more persons actas a partnershi