271B.12-220 Exemptions from minimum share vote requirements.
(1)
(2)
For purposes of subsection (2) of this section:
(a) "Announcement date" means the first general public announcement of the
proposal or intention to make a proposal of the business combination or its
first communication generally to shareholders of the corporation, whichever is
earlier;
(b) "Determination date" means the date on which an interested shareholder first
became an interested shareholder; and
(c) "Valuation date" means:
1.
For a business combination voted upon by shareholders, the latter of the
day prior to the date of the shareholders vote or the date twenty (20)
days prior to the consummation of the business combination; and
2.
For a business combination not voted upon by shareholders, the date of
the consummation of the business combination.
The vote required by KRS 271B.12-210 does not apply to a business combination if
each of the following conditions is met:
(a) The aggregate amount of the cash and the market value as of the valuation
date of consideration, other than cash to be received per share by holders of
common stock in such business combination, is at least equal to the highest of
the following:
1.
The highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the interested
shareholder for any shares of common stock of the same class or series
acquired by it:
a.
Within the five (5) year period immediately prior to the
announcement date of the proposal of the business combination;
b.
In the transaction in which it became an interested shareholder,
whichever is higher; or
2.
The market value per share of common stock of the same class or series
on the announcement date or on the determination date, whichever is
higher; or
3.
The price per share equal to the market value per share of common stock
of the same class or series determined pursuant to subparagraph 2. of
this paragraph, multiplied by the fraction of:
a.
The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the interested
shareholder for any shares of common stock of the same class or
series acquired by it within the five (5) year period immediately
prior to the announcement date, over
b.
The market value per share of common stock of the same class or
series on the first day in such five (5) year period on which the
interested shareholder acquired any shares of common stock;
(b)
(c)
(d)
The aggregate amount of the cash and the market value as of the valuation
date of consideration other than cash to be received per share by holders of
shares of any class or series of outstanding stock other than common stock is
at least equal to the highest of the following, whether or not the interested
shareholder has previously acquired any shares of a particular class or series
of stock:
1.
The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the interested
shareholder for any shares of such class of stock acquired by it:
a.
Within the five (5) year period immediately prior to the
announcement date of the proposal of the business combination;
b.
In the transaction in which it became an interested shareholder,
whichever is higher; or
2.
The highest preferential amount per share to which the holders of shares
of such class of stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the corporation;
3.
The market value per share of such class of stock on the announcement
date or on the determination date, whichever is higher; or
4.
The price per share equal to the market value per share of such class of
stock determined pursuant to subparagraph 3. of this paragraph,
multiplied by the fraction of:
a.
The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the interested
shareholder for any shares of any class of voting stock acquired by
it within the five (5) year period immediately prior to the
announcement date, over
b.
The market value per share of the same class of voting stock on the
first day in such five (5) year period on which the interested
shareholder acquired any shares of the same class of voting stock.
In making any price calculation under this section, appropriate adjustments
shall be made to reflect any reclassification, including any reverse stock split;
recapitalization; reorganization; or any similar transaction which has the effect
of reducing the number of outstanding shares of the stock. The consideration
to be received by holders of any class or series of outstanding stock is to be in
cash or in the same form as the interested shareholder has previously paid for
shares of the same class or series of stock. If the interested shareholder has
paid for shares of any class of stock with varying forms of consideration, the
form of consideration for such class of stock shall be either cash or the form
used to acquire the largest number of shares of such class or series of stock
previously acquired by it;
1.
After the interested shareholder has become an interested shareholder
and prior to the consummation of such business combination:
a.
(3)
(a)
(b)
(4)
(a)
There shall have been no failure to declare and pay, at the regular
date therefor, any full periodic dividends, whether or not
cumulative, on any outstanding preferred stock of the corporation;
b.
There shall have been no reduction in the annual rate of dividends
paid on any class or series of stock of the corporation that is not
preferred stock, except as necessary to reflect any subdivision of
the stock; and an increase in such annual rate of dividends as
necessary to reflect any reclassification, including any reverse
stock split; recapitalization; reorganization; or any similar
transaction which has the effect of reducing the number of
outstanding shares of the stock; and
c.
The interested shareholder did not become the beneficial owner of
any additional shares of stock of the corporation, except as part of
the transaction which resulted in such interested shareholder
becoming an interested shareholder or by virtue of proportionate
stock splits or stock dividends.
2.
The provisions of sub-subparagraphs a. and b. of subparagraph 1. of this
paragraph do not apply if no interested shareholder or an affiliate or
associate of the interested shareholder voted as a director of the
corporation in a manner inconsistent with such sub-subparagraphs and
the interested shareholder, within ten (10) days after any act or failure to
act inconsistent with such sub-subparagraphs, notifies the board of
directors of the corporation in writing that the interested shareholder
disapproves thereof and requests in good faith that the board of directors
rectify such act or failure to act.
Whether or not such business combinations are authorized or consummated in
whole or in part after July 13, 1984, or after the interested shareholder became
an interested shareholder, the requirements of KRS 271B.12-210 do not apply
to business combinations that specifically, generally, or generally by types, as
to specifically identified or unidentified existing or future interested
shareholders or their affiliates or associates, have been approved or exempted
therefrom by resolution of the board of directors of the corporation prior to
two (2) months after July 13, 1984, or such earlier date as may be irrevocably
established by resolution of the board of directors; and
Unless by its terms a resolution adopted under this subsection is made
irrevocable, it may be altered or repealed by the board of directors, but this
shall not affect any business combinations that have been consummated, or
are the subject of an existing agreement entered into, prior to the alteration or
repeal.
Unless the articles of incorporation or bylaws of the corporation specifically
provide otherwise, the requirements of KRS 271B.12-210 do not apply to
business combinations of a corporation that, on July 13, 1984, had an existing
interested shareholder, whether a business combination is with the existing
shareholder or with any other person who becomes an interested shareholder,
(5)
after July 13, 1984, or their present or future affiliates, unless, at any time after
July 13, 1984, the board of directors of the corporation elects by resolution,
adopted by a majority of the continuing directors at a meeting of the board of
directors at which a quorum consisting of at least a majority of the continuing
directors is present, to be subject, in whole or in part, specifically, generally,
or generally by types, as to specifically identified or unidentified interested
shareholders, to the requirements of KRS 271B.12-210;
(b) The articles of incorporation or bylaws of the corporation may provide that if
the board of directors adopts a resolution under paragraph (a) of this
subsection, the resolution shall be subject to approval of the shareholders in
the manner and by the vote specified in the articles of incorporation or the
bylaws;
(c) An election under this subsection may be added to but may not be altered or
repealed except by an amendment to the articles of incorporation adopted by a
vote of shareholders meeting the requirements of subsection (5)(a)2. of this
section; and
(d) If a corporation elects under this subsection to be included within the
provisions of KRS 271B.12-210 generally, without qualification or limitation,
it shall file with the secretary of state articles of amendment, including a copy
of the resolution making the election and a statement describing the manner in
which the resolution was adopted. The articles of amendment shall be
executed in the manner required by KRS 271B.10-060.
(a) Unless the articles of incorporation of the corporation provide otherwise, the
requirements of a shareholder vote and board approval in KRS 271B.12-210
do not apply to any business combination of:
1.
A corporation which does not have on the date any interested
shareholder became an interested shareholder:
a.
Five hundred (500) or more beneficial owners of its stock;
b.
Its principal executive office located in this state; and
c.
One (1) or more of the following:
(i) More than two hundred (200) beneficial owners of its stock residing in this
state;
(ii) More than ten percent (10%) of the beneficial owners of its stock residing in
this state;
(iii) More than ten percent (10%) of its outstanding stock owned by residents of
this state;
(iv) More than one hundred (100) employees of the corporation and its
subsidiaries working within this state; or
(v) Assets located in this state and owned by, or owned by a person or entity
controlled by, the corporation with a value of at least one million dollars
(,000,000);
2.
(b)
A corporation whose original articles of incorporation have a provision,
or whose shareholders adopt an amendment to the articles of
incorporation after July 13, 1984, by a vote of at least eighty percent
(80%) of the votes entitled to be cast by outstanding shares of voting
stock of the corporation, voting together as a single voting group and
two-thirds (2/3) of the votes entitled to be cast by persons, if any, who
are not interested shareholders of the corporation, voting together as a
single voting group, expressly electing not to be governed by KRS
271B.12-210; or
3.
An investment company registered under the federal Investment
Company Act of 1940, as amended; a bank or a bank holding company
as defined in the federal Bank Holding Company Act of 1956, as
amended; a savings and loan holding company as defined in the federal
Savings and Loan Holding Company Amendments of 1967, as amended;
and a domestic insurer as defined under KRS 304.1-070; and
For purposes of subparagraph 1. of paragraph (a) of this subsection, all
shareholders of a corporation who have executed an agreement to which the
corporation is an executing party governing the purchase and sale of stock of
the corporation or a voting trust agreement governing stock of the corporation
shall be considered a single beneficial owner of the stock covered by the
agreement.
Effective: January 1, 1989
History: Amended 1988 Ky. Acts ch. 22, sec. 3, effective July 15, 1988; and ch. 23,
sec. 176, effective January 1, 1989. -- Created 1984 Ky. Acts ch. 355, sec. 3,
effective July 13, 1984.
Formerly codified as KRS 271A.398.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.