Section 351.407

Title XXIII CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS

Chapter 351

Effective - 28 Aug 1989   

  351.407.  Control shares acquisition procedures — exceptions. — 1.  Unless, before the control share acquisition, the corporation's articles of incorporation or bylaws provide that this section does not apply to control share acquisitions of shares of the corporation, control shares of an issuing public corporation acquired in a control share acquisition have only such voting rights as are conferred by subsection 5 of this section.

  2.  Any person who proposes to make or has made a control share acquisition may at the person's election deliver an acquiring person statement to the issuing public corporation at the issuing public corporation's principal office.  The acquiring person statement must set forth all of the following:

  (1)  The identity of the acquiring person and each other member of any group of which the person is a part for purposes of determining control shares;

  (2)  A statement that the acquiring person statement is given pursuant to this section;

  (3)  The number of shares of the issuing public corporation owned, directly or indirectly, by the acquiring person and each other member of the group;

  (4)  The range of voting power under which the control share acquisition falls or would, if consummated, fall;

  (5)  If the control share acquisition has not taken place:

  (a)  A description in reasonable detail of the terms of the proposed control share acquisition; and

  (b)  Representations of the acquiring person, together with a statement in reasonable detail of the facts upon which they are based, that the proposed control share acquisition, if consummated, will not be contrary to law, and that the acquiring person has the financial capacity to make the proposed control share acquisition.

  3.  (1)  If the acquiring person so requests at the time of delivery of an acquiring person statement and gives an undertaking to pay the corporation's expenses of a special meeting, the directors of the issuing public corporation shall within ten days thereafter call a special meeting of shareholders of the issuing public corporation for the purpose of considering the voting rights to be accorded the shares acquired or to be acquired in the control share acquisition.

  (2)  Unless the acquiring person agrees in writing to another date, the special meeting of shareholders shall be held within fifty days after receipt of the request by the issuing public corporation.

  (3)  If no request is made, the voting rights to be accorded the shares acquired in the control share acquisition shall be presented to the next special or annual meeting of shareholders.

  (4)  If the acquiring person so requests in writing at the time of delivery of its acquiring statement pursuant to this subsection, the special meeting must not be held sooner than thirty days after receipt by the issuing public corporation of the acquiring person statement.

  4.  (1)  If a special meeting is requested, notice of the special meeting of shareholders shall be given as promptly as reasonably practicable by the issuing public corporation to all shareholders of record as of the record date set for the meeting, whether or not entitled to vote at the meeting.

  (2)  Notice of the special or annual shareholder meeting at which the voting rights are to be considered must include or be accompanied by both of the following:

  (a)  A copy of the acquiring person statement delivered to the issuing public corporation pursuant to this section; and

  (b)  A statement by the board of directors of the corporation of its position or recommendation, or that it is taking no position or making no recommendation, with respect to the proposed control share acquisition.

  5.  (1)  Control shares acquired in a control share acquisition have the same voting rights as were accorded the shares before the control share acquisition only to the extent granted by resolution approved by the shareholders of the issuing public corporation.

  (2)  To be approved under this section, the resolution must be approved by:

  (a)  The affirmative vote of a majority of all outstanding shares entitled to vote at such meeting voting by class if required by the terms of such shares; and

  (b)  Also by the affirmative vote of a majority of all outstanding shares entitled to vote at such meeting voting by class if required by the terms of such shares, excluding all interested shares.

  6.  If a shareholder shall file with the corporation, prior to or at the meeting of shareholders at which the voting rights to be accorded any control shares are submitted to a vote, a written objection to such voting rights being accorded any control shares, and shall not vote in favor thereof, and such shareholder, within twenty days after approval of voting rights being accorded any control shares, shall make written demand on the corporation for payment of the fair value of his shares as of the day prior to the date on which the vote was taken approving voting rights being accorded any control shares, the corporation shall pay to such shareholder, upon surrender of his certificate or certificates representing such shares, the fair value of his shares.  Such demand shall state the number and class of the shares owned by such dissenting shareholder.  Any shareholder failing to make demand within the twenty-day period provided in this subsection shall be conclusively presumed to have consented to the control share acquisition.

  7.  If within thirty days after the date of approval of voting rights being accorded any control shares the value of such shares is agreed upon between the dissenting shareholder and the corporation, payment for the shares shall be made within ninety days after approval of voting rights being accorded any control shares, upon the surrender of his certificate or certificates representing such shares.  Upon payment of the agreed value, the dissenting shareholder shall cease to have any interest in such shares or in the corporation.

  8.  If, within the thirty-day period provided in subsection 7 of this section, the shareholder and the corporation do not so agree, then the dissenting shareholder may, within sixty days after the expiration of such thirty-day period, file a petition in any court of competent jurisdiction within the county in which the registered office of the corporation is situated, asking for a finding and determination of the fair value of such shares, and shall be entitled to judgment against the corporation for the amount of such fair value as of the day prior to the date on which such vote was taken approving such control share acquisition, together with interest thereon to the date of such judgment.  The judgment shall be payable only upon and simultaneously with the surrender to the corporation of the certificate or certificates representing such shares.  Upon the payment of the judgment, the dissenting shareholder shall cease to have any interest in such shares, or in the corporation.  Such shares may be held and disposed of by the corporation as it may see fit.  Unless the dissenting shareholder shall file such petition within the time provided in this subsection, such shareholder and all persons claiming under him shall be conclusively presumed to have consented to the control share acquisition.

  9.  Except as expressly provided in this section, nothing in this section shall be construed to affect or impair any right, remedy, obligation, duty, power, or authority of any acquiring person, any issuing public corporation, the board of directors of any acquiring person or issuing public corporation, or any other person under the laws of this state or any other state of the United States of America.  The requirements of this section shall be in addition to, and shall in no way limit, the validly adopted provisions of the articles of incorporation of any issuing public corporation.

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(L. 1984 S.B. 409, A.L. 1987 H.B. 349, A.L. 1989 S.B. 141)