§ 7-5.2-4. Approval of acquisitions.
(a) Notwithstanding anything contained in this chapter to the contrary, except the provisions
of § 7-5.2-5, no resident domestic corporation shall engage in any business combination with any
interested shareholder of the resident domestic corporation for a period of five (5)
years following the interested shareholder's stock acquisition date unless the business
combination or the purchase of stock made by the interested shareholder on the interested
shareholder's stock acquisition date is approved by the board of directors of the
resident domestic corporation prior to the interested shareholder's stock acquisition
date.
(b) Notwithstanding anything contained in this chapter to the contrary, except the provisions
of subsection (a) and § 7-5.2-5, no resident domestic corporation shall engage at any time in any business combination
with any interested shareholder of the resident domestic corporation other than a
business combination specified in any one of subsections (b)(1), (b)(2), or (b)(3):
(1) A business combination approved by the board of directors of the resident domestic
corporation prior to the interested shareholder's stock acquisition date, or where
the purchase of stock made by the interested shareholder on the interested shareholder's
stock acquisition date had been approved by the board of directors of the resident
domestic corporation prior to the interested shareholder's stock acquisition date;
(2) A business combination approved by the affirmative vote of the holders of two-thirds
(â…”) of the outstanding voting stock not beneficially owned by the interested shareholder
or any affiliate or associate of the interested shareholder at a meeting called for
that purpose no earlier than five (5) years after the interested shareholder's stock
acquisition date;
(3) A business combination that meets all of the following conditions:
(i) The aggregate amount of the cash and the market value as of the consummation date
of consideration other than cash to be received per share by holders of outstanding
shares of common stock of the resident domestic corporation in the business combination
is at least equal to the higher of the following:
(A) The highest per-share price paid by the interested shareholder at a time when the
interested shareholder was the beneficial owner, directly or indirectly, of five percent
(5%) or more of the outstanding voting stock of the resident domestic corporation,
for any shares of common stock of the same class or series acquired by it within the
five-year (5) period immediately prior to the announcement date concerning the business
combination, or within the five-year (5) period immediately prior to, or in, the transaction
in which the interested shareholder became an interested shareholder, whichever is
higher; plus, in either case, interest compounded annually from the earliest date
on which the highest per-share acquisition price was paid through the consummation
date at the rate for one-year United States treasury obligations from time to time
in effect less the aggregate amount of any cash dividends paid, and the market value
of any dividends paid other than in cash, per share of common stock since the earliest
date, up to the amount of the interest; and
(B) The market value per share of common stock on the announcement date with respect to
the business combination or on the interested shareholder's stock acquisition date,
whichever is higher, plus interest compounded annually from the date through the consummation
date at the rate for one-year United States treasury obligations from time to time
in effect; less the aggregate amount of any cash dividends paid, and the market value
of any dividends paid other than in cash, per share of common stock since the date,
up to the amount of the interest;
(ii) The aggregate amount of the cash and the market value as of the consummation date
of consideration other than cash to be received per share by holders of outstanding
shares of any class or series of stock, other than common stock, of the resident domestic
corporation is at least equal to the highest of the following, whether or not the
interested shareholder has previously acquired any shares of the class or series of
stock:
(A) The highest per-share price paid by the interested shareholder at a time when he or
she was the beneficial owner, directly or indirectly, of five percent (5%) or more
of the outstanding voting stock of the resident domestic corporation, for any shares
of the class or series of stock acquired by it within the five-year (5) period immediately
prior to the announcement date with respect to the business combination, or within
the five-year (5) period immediately prior to, or in, the transaction in which the
interested shareholder became an interested shareholder, whichever is higher; plus,
in either case, interest compounded annually from the earliest date on which the highest
per-share acquisition price was paid through the consummation date at the rate for
one-year United States treasury obligations from time to time in effect; less the
aggregate amount of any cash dividend paid, and the market value of any dividends
paid other than in cash, per share of the class or series of stock since the earliest
date, up to the amount of the interest;
(B) The highest preferential amount per share to which the holders of shares of the class
or series of stock are entitled in the event of any voluntary liquidation, dissolution,
or winding up of the resident domestic corporation, plus the aggregate amount of any
dividends declared or due to which the holders are entitled prior to payment of dividends
on some other class or series of stock (unless the aggregate amount of the dividends
is included in the preferential amount); and
(C) The market value per share of the class or series of stock on the announcement date
with respect to the business combination or on the interested shareholder's stock
acquisition date, whichever is higher; plus interest compounded annually from the
date through the consummation date at the rate for one-year United States treasury
obligations from time to time in effect; less the aggregate amount of any cash dividends
paid, and the market value of any dividends paid other than in cash, per share of
the class or series of stock since the date, up to the amount of the interest;
(iii) The consideration to be received by holders of a particular class or series of outstanding
stock, including common stock, of the resident domestic corporation in the business
combination is in cash or in the same form as the interested shareholder has used
to acquire the largest number of shares of the class or series of stock previously
acquired by it, and the consideration shall be distributed promptly;
(iv) The holders of all outstanding shares of stock of the resident domestic corporation
not beneficially owned by the interested shareholder immediately prior to the consummation
of the business combination are entitled to receive in the business combination cash
or other consideration for the shares in compliance with subsections (b)(3)(i) through
(b)(3)(iii);
(v) After the interested shareholder's stock acquisition date and prior to the consummation
date of the business combination, the interested shareholder has not become the beneficial
owner of any additional shares of voting stock of the resident domestic corporation
except:
(A) As part of the transaction that resulted in the interested 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 business combination under § 7-5.2-3(5)(v);
(C) Through a business combination meeting all of the conditions of this section; or
(D) Through purchase by the interested shareholder at any price which, if the price had
been paid in an otherwise permissible business combination the announcement date and
consummation date of which were the date of the purchase, would have satisfied the
requirements of subsections (b)(3)(i) through (b)(3)(iii) of this section.