BUSINESS
CORPORATION CODE - CHAPTERS 9-13
Table of Contents [all chapters
of the Business Corporation Code]
CHAPTER 9 - MERGER OR CONSOLIDATION; GUARANTEE; DISPOSITION OF ASSETS
901. POWER OF MERGER OR CONSOLIDATION
(a) Two
or more domestic corporations may, as provided in this chapter:
(1) Merge
into a single corporation which shall be one of the constituent corporations;
or
(2) Consolidate
into a single corporation which shall be a new corporation to be formed
pursuant to the consolidation.
(b) Whenever
used in this chapter:
(1) "Merger"
means a procedure of the character described in subparagraph (a)(1).
(2) "Consolidation"
means an procedure of the character described in subparagraph (a)(2).
(3) "Constituent
corporation" means an existing corporation that is participating
in the merger or consolidation with one or more other corporations.
(4) "Surviving
corporation" means the constituent corporation into which one
or more other constituent corporations are merged.
(5) "Consolidated
corporation'' means the new corporation into which two or more constituent
corporations are consolidated.
902. PLAN OF MERGER OR CONSOLIDATION
(a) The
board of each corporation proposing to participate in a merger or consolidation
under section 901 (Power of merger or consolidation) shall adopt a plan
of merger or consolidation, setting forth:
(1) The
name of each constituent corporation and, if the name of any of them
has been changed, the name under which is was formed; and the name
of the surviving corporation, or the name, or the method of determining
it, of the consolidate corporation.
(2) As
to each constituent corporation, the designation and number of outstanding
shares of each class and series, specifying the classes and series
entitled to vote and further specifying each class and series, if
any, entitled to vote as a class; and, if the number of any such shares
is subject to change prior to the effective date of the merger or
consolidation, the manner in which such change may occur.
(3) The
terms and conditions of the proposed merger or consolidation, including
the manner and basis of converting the shares of each constituent
corporation into shares, bonds or other securities of the surviving
or consolidated corporation, or the cash or other consideration to
be paid or delivered in exchange for shares of each constituent corporation,
or a combination thereof
(4) In
case of merger, a statement of any amendments or changes in the certificate
of incorporation of the surviving corporation to be effected by such
merger; in case of consolidation, all statements required to be included
in a certificate of incorporation for a corporation formed under this
chapter, except statements as to facts not available at the time the
plan of consolidation is adopted by the board.
(5) Such
other provisions with respect to the proposed merger or consolidation
as the board considers necessary or desirable.
903. AUTHORIZATION BY SHAREHOLDERS
(a) The
board of each constituent corporation, upon adopting such plan of merger
or consolidation, shall submit such plan to a vote of shareholders in
accordance with the following:
(1) Notice
of meeting shall be given to each shareholder of record, as of the
record date fixed pursuant to section 604 (Fixing record date), whether
or not entitled to vote. A copy of the plan of merger or consolidation
or an outline of the material features of the plan shall accompany
such notice.
(2) The
plan of merger or consolidation shall be adopted at a meeting of shareholders
by vote of the holders of two-thirds of all outstanding shares entitled
to vote thereon. Notwithstanding any provision in the certificate
of incorporation, the holders of shares of a class or series shall
be entitled to vote and to vote as a class if the plan of merger or
consolidation contains any provision which, if contained in an amendment
to the certificate of incorporation, would entitle the holders of
shares of such class or series to vote and to vote as a class thereon.
In such case, in addition to the authorization of the merger or consolidation
by vote of the holders of two-thirds of all outstanding shares entitled
to vote thereon, the merger or consolidation shall be authorized by
vote of the holders of a majority of all outstanding shares of each
such class or series.
(b) Notwithstanding
shareholder authorization and at any time prior to the filing of the
certificate of merger or consolidation, the plan of merger or consolidation
may be abandoned pursuant to a provision for such abandonment, if any,
contained in the plan of merger or consolidation.
904. CERTIFICATE OF MERGER OR CONSOLIDATION; CONTENTS
(a) After
adoption of the plan of merger or consolidation by the board and shareholders
of each constituent corporation, unless the merger or consolidation
is abandoned in accordance with paragraph (b) of section 903 (Authorization
by shareholders), a certificate of merger or consolidation, entitled
"Certificate of merger (or consolidation) of .......... and ..........
into ....... (names of corporations) under section 904 of the Business
Corporation Code", shall be signed and verified on behalf of each
constituent corporation and delivered to the Nation Clerk. It shall
set forth:
(1) The
statements required by subparagraphs (a)(l), (2) and (4) of section
902 (Plan of merger or consolidation).
(2) The
effective date of the merger or consolidation if other than the date
of filing of the certificate of merger or consolidation by the Nation
Clerk.
(3) In
the case of consolidation, any statement required to be included in
a certificate of incorporation for a corporation formed under this
chapter but which was omitted under subparagraph (a)(4) of section
902.
(4) The
date when the certificate of incorporation of each constituent corporation
was filed by the Nation Clerk.
(5) The
manner in which the merger or consolidation was authorized with respect
to each constituent corporation.
905. MERGER OF PARENT AND SUBSIDIARY CORPORATION
(a) Any
domestic corporation owning at least ninety percent of the outstanding
shares of each class of another domestic corporation or corporations
may either merge such other corporation or corporations into itself
without the authorization of the shareholders of any such corporation
or merge itself and one or more of such other corporations into one
of such other corporations with the authorization of the parent corporation's
shareholders in accordance with paragraph (a) of section 903 (Authorization
by shareholders). In either case the board of such parent corporation
shall adopt a plan of merger, setting forth:
(1) The
name of each corporation to be merged and the name of the surviving
corporation, and if the name of any of them has been changed, the
name under which it was formed.
(2) The
designation and number of outstanding shares of each class of each
corporation to be merged and the number of such shares of each class,
if any, owned by the surviving corporation; and if the number of any
such shares is subject to change prior to the effective date of the
merger, the manner in which such change may occur.
(3) The
terms and conditions of the proposed merger, including the manner
and basis of converting the shares of each subsidiary corporation
to be merged not owned by the parent corporation into shares, bonds
or other securities of the surviving corporation, or the cash or other
consideration to be paid or delivered in exchange for shares of each
such subsidiary corporation, or a combination thereof
(4) If
the parent corporation is not the surviving corporation, provision
for the pro rata issuance of shares of the surviving corporation to
the shareholders of the parent corporation on surrender of any certificates
therefore.
(5) If
the parent corporation is not the surviving corporation, a statement
of any amendments or changes in the certificate of incorporation of
the surviving corporation to be effected by the merger.
(6) Such
other provisions with respect to the proposes merger as the board
considers necessary or desirable.
(b) If
the surviving corporation is the parent corporation, a copy of such
plan of merger or an outline of the material features thereof shall
be given, personally or by mail, to all holders of shares of each subsidiary
corporation to be merged not owned by the parent corporation, unless
the giving of such copy or outline has been waived by such holders.
(c) A certificate
of merger, entitled "Certificate of merger of .......... into ..........
(names of corporations) under section 905 of the Business Corporation
Code", shall be signed, verified and delivered to the Nation Clerk
by the surviving corporation. If the surviving corporation is the parent
corporation and such corporation does not own all shares of each subsidiary
corporation to be merged, such certificate shall be delivered not less
than thirty days after the giving of a copy or outline of the material
features of the plan of merger to shareholders of each such subsidiary
corporation, or at any time after the waiving thereof by the holders
of all of the outstanding shares of each such subsidiary corporation
not owned by the surviving corporation. The certificate shall set forth:
(1) The
statements required by subparagraphs (a)(1), (2), (4) and (5) of this
section.
(2) The
effective date of the merger if other than the date of filing of the
certificate of merger by the Nation Clerk.
(3) The
date when the certificate of incorporation of each constituent corporation
was filed by the Nation Clerk.
(4) A
statement that the plan of merger was adopted by the board of directors
of the parent corporation.
(5) If
the surviving corporation is the parent corporation and such corporation
does not own all the shares of each subsidiary corporation to be merged,
either the date of the giving to holders of shares of each subsidiary
corporation not owned by the surviving corporation of a copy of the
plan of merger or an outline of the material features thereof, or
a statement that the giving of such copy or outline has been waived,
if such is the case.
(6) If
the parent corporation is not the surviving corporation, a statement
that the proposed merger has been approved by the shareholders of
the parent corporation in accordance with paragraph (a) of section
903 (Authorization by shareholders).
(d) The
surviving corporation shall thereafter cause a copy of such certificate,
to be filed in the office of the Nation Clerk
(e) Paragraph
(b) of section 903 (Authorization by shareholders) shall apply to a
merger under this section.
(f) The
right of merger granted by this section to certain corporations shall
not preclude the exercise by such corporations of any other right of
merger or consolidation under this chapter.
906. EFFECT OF MERGER OR CONSOLIDATION
(a) Upon
the filing of the certificate of merger or consolidation by the Nation
Clerk or on such date subsequent thereto, not to exceed thirty days,
as shall be set forth in such certificate, the merger or consolidation
shall be effected.
(b) When
such merger or consolidation has been effected:
(1) Such
surviving or consolidated corporation shall thereafter, consistently
with its certificate of incorporation as altered or established by
the merger or consolidation, possess all the rights, privileges, immunities,
powers and purposes of each of the constituent corporations.
(2) All
the property, real and personal, including subscriptions to shares,
causes of action and every other asset of each of the constituent
corporations, shall vest in such surviving or consolidated corporation
without further act or deed.
(3) The
surviving or consolidated corporation shall assume and be liable for
all the liabilities, obligations and penalties of each of the constituent
corporations. No liability or obligation due or to become due, claim
or demand for any cause existing against any such corporation, or
any shareholder, officer or director thereof, shall be released or
impaired by such merger or consolidation. No action or proceeding,
whether civil or criminal, then pending by or against any such constituent
corporation, or any shareholder, officer or director thereof, shall
abate or be discontinued by such merger or consolidation, but may
be enforced, prosecuted, settled or compromised as if such merger
or consolidation had not occurred, or such surviving or consolidated,
corporation may be substituted in such action or special proceeding
in place of any constituent corporation.
(4) In
the case of a merger, the certificate of incorporation of the surviving
corporation shall be automatically amended to the extent, if any,
that changes in its certificate of incorporation are set forth in
the plan of merger; and, in the case of a consolidation, the statements
set forth in the certificate of consolidation and which are required
or permitted to be set forth in a certificate of incorporation of
a corporation formed under this chapter shall be its certificate of
incorporation.
907. MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS
(a) One
or more foreign corporations and one or more domestic corporations may
be merged or consolidated into a corporation, if such merger or consolidation
is permitted by the laws of the jurisdiction under which each such foreign
corporation is incorporated. With respect to such merger or consolidation,
any reference in paragraph (b) of section 901 (Power of merger or consolidation)
to a corporation shall, unless the context otherwise requires, include
both domestic and foreign corporations.
(b) With
respect to procedure, including the requirement of shareholder authorization,
each domestic corporation shall comply with the provisions of this chapter
relating to merger or consolidation of domestic corporations, and each
foreign corporation shall comply with the applicable provisions of the
law of the jurisdiction under which it is incorporated.
(c) The
procedure for the merger of a subsidiary corporation or corporations
under section 905 (Merger of parent and subsidiary corporations) shall
be available where either a subsidiary corporation or the corporation
owning at least ninety percent of the outstanding shares of each class
of a subsidiary is a foreign corporation, and such merger is permitted
by the laws of the jurisdiction under which such foreign corporation
is incorporated.
(d) If
the surviving or consolidated corporation is, or is to be, a domestic
corporation, a certificate of merger or consolidation shall be signed,
verified and delivered to the Nation Clerk as provided in section 904
(Certificate of merger or consolidation; contents) or 905 (Merger of
parent and subsidiary corporations), as the case may be. In addition
to the matters specified in such sections, the certificate shall set
forth as to each constituent foreign corporation the jurisdiction and
date of its incorporation and the date when its application for authority
to do business within the territorial jurisdiction of the Nation was
filed by the Nation Clerk, and its fictitious name used in this Nation
pursuant to chapter thirteen of this chapter, if applicable, or, if
no such application has been filed, a statement to such effect.
(e) If
the surviving or consolidated corporation is, or is to be, formed under
the law of any jurisdiction other than the Nation:
(1) It
shall comply with the provisions of this chapter relating to foreign
corporations if it is to do business within the territorial jurisdiction
of the Nation.
(2) It
shall deliver to the Nation Clerk a certificate, entitled "Certificate
of merger (or consolidation) of .......... and .......... into ..........
(names of corporations) under section 907 of the Business Corporation
Code", which shall be signed and verified on behalf of each constituent
domestic and foreign corporation. It shall set forth:
(A)
If the procedure for the merger or consolidation of a constituent
domestic corporation was effected in compliance with sections 902
(Plan of merger or consolidation) and 903 (Authorization by shareholders),
the following:
(i)
The statements required by subparagraphs (a)(1) and (2) of section
902.
(ii)
The effective date of the merger or consolidation if other than
the date of filing of the certificate of merger or consolidation
by the Nation Clerk.
(iii)
The manner in which the merger or consolidation was authorized
with respect to each constituent domestic corporation and that
the merger or consolidation is permitted by the laws of the jurisdiction
of each constituent foreign corporation and is in compliance therewith.
(B)
If the procedure for the merger of a subsidiary corporation was
effected in compliance with section 905, the following:
(i)
The statements required by subparagraphs (a)(1), (2), (4) and
(5) of section 905.
(ii)
The effective date of the merger if other than the date of filing
of the certificate of merger by the Nation Clerk.
(iii)
If the surviving foreign corporation does not own all the shares
of a subsidiary domestic corporation being merged, either the
date of the giving to holders of shares of each subsidiary domestic
corporation not owned by the surviving foreign corporation of
a copy of the plan of merger or an outline of the material features
thereof, or a statement that the giving of such copy or outline
has been waived, if such is the case.
(iv)
That the merger is permitted by the laws of the jurisdiction of
each constituent foreign corporation and is in compliance therewith.
(v)
If the parent domestic corporation is not the surviving corporation,
a statement that the proposed merger has been approved by the
shareholders of the parent domestic corporation in accordance
with paragraph (a) of section 903 (Authorization by shareholders).
(C)
The jurisdiction and date of incorporation of the surviving or consolidated
foreign corporation, the date when its application for authority
to do business within the territorial jurisdiction of the Nation
was filed by the Nation Clerk, and its fictitious name used within
the territorial jurisdiction of the Nation pursuant to chapter thirteen
of this chapter, if applicable, or, if no such application has been
filed, a statement to such effect and that it is not to do business
within the territorial jurisdiction of the Nation until an application
for such authority shall have been filed by such department.
(D)
The date when the certificate of incorporation of each constituent
domestic corporation was filed by the Nation Clerk and the jurisdiction
and date of incorporation of each constituent foreign corporation,
other than the surviving or consolidated foreign corporation, and,
in the case of each such corporation authorized to do business within
the territorial jurisdiction of the Nation, the date when its application
for authority was filed by the secretary of state.
(E)
An agreement that the surviving or consolidated foreign corporation
may be served with process within the territorial jurisdiction of
the Nation in any action or special proceeding for the enforcement
of any liability or obligation of any domestic corporation or of
any foreign corporation, previously amenable to suit within the
territorial jurisdiction of the Nation, which is a constituent corporation
in such merger or consolidation, and for the enforcement, as provided
in this chapter, of the right of shareholders of any constituent
domestic corporation to receive payment for their shares against
the surviving or consolidated corporation.
(F)
An agreement that, subject to the provisions of section 623 (Procedure
to enforce shareholder's right to receive payment for shares), the
surviving or consolidated foreign corporation will promptly pay
to the shareholders of each constituent domestic corporation the
amount, if any, to which they shall be entitled under the provisions
of this chapter relating to the right of shareholders to receive
payment for their shares.
(G)
A designation of the Nation Clerk as its agent upon whom process
against it may be served in the manner set forth in paragraph (b)
of section 306 (Service of process), in any action or special proceeding,
and a post office address, to which the Nation Clerk shall mail
a copy of any process against it served upon him. Such post office
address shall supersede any prior address designated as the address
to which process shall be mailed.
(f) Upon
the filing of the certificate of merger or consolidation by the Nation
Clerk or on such date subsequent thereto, not to exceed ninety days,
as shall be set forth in such certificate, the merger or consolidation
shall be effected.
(g) The
surviving or consolidated domestic or foreign corporation shall thereafter
cause a copy of such certificate, to be filed in the office of the Nation
Clerk
(h) If
the surviving or consolidated corporation is, or is to be, formed under
the law of the Nation, the effect of such merger or consolidation shall
be the same as in the case of the merger or consolidation of domestic
corporations under section 906 (Effect of merger or consolidation).
If the surviving or consolidated corporation is, or is to be, incorporated
under the law of any jurisdiction other than the Nation, the effect
of such merger or consolidation shall be the same as in the case of
the merger or consolidation of domestic corporations, except in so far
as the law of such other jurisdiction provides otherwise.
908. GUARANTEE AUTHORIZED BY SHAREHOLDERS
A guarantee
may be given by a corporation, although not in furtherance of its corporate
purposes, when authorized at a meeting of shareholders by vote of the
holders of two-thirds of all outstanding shares entitled to vote thereon.
If authorized by a like vote, such guarantee may be secured by a mortgage
or pledge of, or the creation of a security interest in, all or any
part of the corporate property, or any interest therein, wherever situated.
909. SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ASSETS
(a) A sale,
lease, exchange or other disposition of all or substantially all the
assets of a corporation, if not made in the usual or regular course
of the business actually conducted by such corporation, shall be authorized
only in accordance with the following procedure:
(1) The
board shall authorize the proposed sale, lease, exchange or other
disposition and direct its submission to a vote of shareholders.
(2) Notice
of meeting shall be given to each shareholder of record, whether or
not entitled to vote.
(3) The
shareholders shall approve such sale, lease, exchange or other disposition
and may fix, or may authorize the board to fix, any of the terms and
conditions thereof and the consideration to be received by the corporation
therefore, which may consist in whole or in part of cash or other
property, real or personal, including shares, bonds or other securities
of any other domestic or foreign corporation or corporations, by vote
at a meeting of shareholders of the holders of two-thirds of all outstanding
shares entitled to vote thereon.
(b) A recital
in a deed, lease or other instrument of conveyance executed by a corporation
to the effect that the property described therein does not constitute
all or substantially all of the assets of the corporation, or that the
disposition of the property affected by said instrument was made in
the usual or regular course of business of the corporation, or that
the shareholders have duly authorized such disposition, shall be presumptive
evidence of the fact so recited.
(c) An
action to set aside a deed, lease or other instrument of conveyance
executed by a corporation affecting real property or real and personal
property may not be maintained for failure to comply with the requirements
of paragraph (a) unless the action is commenced and a notice of pendency
of action is filed within one year after such conveyance, lease or other
instrument is recorded.
(d) Whenever
a transaction of the character described in paragraph (a) involves a
sale, lease, exchange or other disposition of all or substantially all
the assets of the corporation, including its name, to a new corporation
formed under the same name as the existing corporation, upon the expiration
of thirty days from the filing of the certificate of incorporation of
the new corporation, the existing corporation shall be automatically
dissolved, unless, before the end of such thirty-day period, such corporation
has changed its name. The adjustment and winding up of the affairs of
such dissolved corporation shall proceed in accordance with the provisions
of chapter 10 (Non-judicial dissolution).
(e) The
certificate of incorporation of a corporation formed under the authority
of paragraph (d) shall set forth the name of the existing corporation,
the date when its certificate of incorporation was filed by the Nation
Clerk, and that the shareholders of such corporation have authorized
the sale, lease, exchange or other disposition of all or substantially
all the assets of such corporation, including its name, to the new corporation
to be formed under the same name as the existing corporation.
(f) Notwithstanding
shareholder approval, the board may abandon the proposed sale, lease,
exchange or other disposition without further action by the shareholders,
subject to the rights, if any, of third parties under any contract relating
thereto.
910. RIGHT OF SHAREHOLDER TO RECEIVE PAYMENT FOR SHARES UPON MERGER
OR CONSOLIDATION, OR SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ASSETS,
OR SHARE EXCHANGE
(a) A shareholder
of a domestic corporation shall, subject to and by complying with section
623 (Procedure to enforce shareholder's right to receive payment for
shares), have the right to receive payment of the fair value of his
shares and the other rights and benefits provided by such section, in
the following cases:
(1) Any
shareholder entitled to vote who does not assent to the taking of
an action specified in subparagraphs (A), (B) and (C).
(A)
Any plan of merger or consolidation to which the corporation is
a party; except that the right to receive payment of the fair value
of his shares shall not be available:
(i)
To a shareholder of the parent corporation in a merger authorized
by section 905 (Merger of parent and subsidiary corporations),
or paragraph (c) of section 907 (Merger or consolidation of domestic
and foreign corporations); and
(ii)
To a shareholder of the surviving corporation in a merger authorized
by this chapter, other than a merger specified in subparagraph
(i), unless such merger effects one or more of the changes specified
in subparagraph (b)(6) of section 806 (Provisions as to certain
proceedings) in the rights of the shares held by such shareholder.
(B)
Any sale, lease, exchange or other disposition of all or substantially
all of the assets of a corporation which requires shareholder approval
under section 909 (Sale, lease, exchange or other disposition of
assets) other than a transaction wholly for cash where the shareholders'
approval thereof is conditioned upon the dissolution of the corporation
and the distribution of substantially all of its net assets to the
shareholders in accordance with their respective interests within
one year after the date of such transaction.
(C)
Any share exchange authorized by section 913 in which the corporation
is participating as a subject corporation; except that the right
to receive payment of the fair value of his shares shall not be
available to a shareholder whose shares have not been acquired in
the exchange.
(2) Any
shareholder of the subsidiary corporation in a merger authorized by
section 905 or paragraph (c) of section 907, or in a share exchange
authorized by paragraph (9) of section 913, who files with the corporation
a written notice of election to dissent as provided in paragraph (c)
of section 623.
911. MORTGAGE OR PLEDGE OF, OR SECURITY INTEREST IN, CORPORATE PROPERTY
The board
may authorize any mortgage or pledge of, or the creation of a security
interest in, all or any part of the corporate property, or any interest
therein, wherever situated. Unless the certificate of incorporation
provides otherwise, no vote or consent of shareholders shall be required
to approve such action by the board.
912. REQUIREMENTS RELATING TO CERTAIN BUSINESS COMBINATIONS
(a) For
the purpose of this section:
(1) "Affiliate"
means a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, a
specified person.
(2) "Announcement
date", when used in reference to any business combination, means
the date of the first public announcement of the final, definitive
proposal for such business combination.
(3) "Associate",
when used to indicate a relationship with any person means (A) any
corporation or organization of which such person is an officer or
partner or is, directly or indirectly, the beneficial owner of ten
percent or more of any class of voting stock, (B) any trust or other
estate in which such person has a substantial beneficial interest
or as to which such person serves as trustee or in a similar fiduciary
capacity, and (C) any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person.
(4) "Beneficial
owner", when used with respect to any stock, means a person:
(A)
that, individually or with or through any of its affiliates or associates,
beneficially owns such stock, directly or indirectly; or
(B)
that, individually or with or through any of its affiliates or associates,
has (i) the right to acquire such stock (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise; provided, however, that a person shall
not be deemed the beneficial owner of stock tendered pursuant to
a tender or exchange offer made by such person or any of such person's
affiliates or associates until such tendered stock is accepted for
purchase or exchange; or (ii) the right to vote such stock pursuant
to any agreement, arrangement or understand (whether or not in writing);
provided, however, that a person shall not be deemed the beneficial
owner of any stock under this item if the agreement, arrangement
or understanding vote such stock (X) arises solely from a revocable
proxy in accordance with the applicable rules an regulations under
the United States Exchange Act and (Y) is not then reportable on
Schedule 13D under the United States Exchange Act (or any comparable
or successor report); or
(C)
that has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
voting pursuant to a revocable proxy or consent as described in
item (ii) of clause (B) of the subparagraph), or disposing of such
stock with any other person that beneficially owns, or whose affiliates
or associates beneficially own, directly or indirectly, such stock.
(5) "Business
combination", when used in reference to any resident domestic
corporation and any interested shareholder of such resident domestic
corporation, means:
(A)
any merger or consolidation of such resident domestic corporation
or any subsidiary of such resident domestic corporation with (i)
such interested shareholder or (ii) any other corporation (whether
or not itself an interested shareholder of such resident domestic
corporation) which is, or after such merger or consolidation would
be, an affiliate or associate of such interested shareholder;
(B)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition
(in one transaction or a series of transactions) to or with such
interested shareholder or any affiliate or associate of such interested
shareholder of assets of such resident domestic corporation or any
subsidiary of such resident domestic corporation (i) having an aggregate
market value equal to ten percent or more of the aggregate market
value of all the assets, determined on a consolidated basis, of
such resident domestic corporation, (ii) having an aggregate market
value equal to ten percent or more of the aggregate market value
of all the outstanding stock of such resident domestic corporation,
or (iii) representing ten percent or more of the earning power or
net income, determined on a consolidated basis, of such resident
domestic corporation;
(C)
the issuance or transfer by such resident domestic corporation or
any subsidiary of such resident domestic corporation (in one transaction
or a series of transactions) of any stock of such resident domestic
corporation or any subsidiary of such resident domestic corporation
which has an aggregate market value equal to five percent or more
of the aggregate market value of all the outstanding stock of such
resident domestic corporation to such interested shareholder or
any affiliate or associate of such interested shareholder except
pursuant to the exercise of warrants or rights to purchase stock
offered, or a dividend or distribution paid or made, pro rata to
all shareholders of such resident domestic corporation;
(D)
the adoption of any plan or proposal for the liquidation or dissolution
of such resident domestic corporation proposed by, or pursuant to
any agreement, arrangement or understanding (whether or not in writing)
with, such interested shareholder or any affiliate or associate
of such interested shareholder;
(E)
any reclassification of securities (including, without limitation,
any stock split, stock dividend, or other distribution of stock
in respect of stock, or any reverse stock split), or recapitalization
of such resident domestic corporation, or any merger or consolidation
of such resident domestic corporation with any subsidiary of such
resident domestic corporation, or any other transaction (whether
or not with or into or otherwise involving such interested shareholder),
proposed by, or pursuant to any agreement, arrangement or understanding
(whether or not in writing) with, such interested shareholder or
any affiliate or associate of such interested shareholder, which
has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class or series of voting
stock or securities convertible into voting stock of such resident
domestic corporation or any subsidiary of such resident domestic
corporation which is directly or indirectly owned by such interested
shareholder or any affiliate or associate of such interested shareholder,
except as a result of immaterial changes due to fractional share
adjustments; or
(F)
any receipt by such interested shareholder or any affiliate or associate
of such interested shareholder of the benefit, directly or indirectly
(except proportionately as a shareholder of such resident domestic
corporation) of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by or through such resident domestic corporation.
(6) "Common
stock'' means any stock other than preferred stock.
(7) "Consummation
date", with respect to any business combination, means the date
of consummation of such business combination, or, in the case of a
business combination as to which a shareholder vote is taken, the
later of the business day prior to the vote or twenty days prior to
the date of consummation of such business combination.
(8) "Control",
including the terms"controlling", "controlled by"
and "under common control with", means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership
of voting stock, by contract, or otherwise. A person's beneficial
ownership of ten percent or more of a corporation's outstanding voting
stock shall create a presumption that such person has control of such
corporation. Notwithstanding the foregoing, a person shall not be
deemed to have control of a corporation if such person holds voting
stock, in good faith and not for the purpose of circumventing this
section, as an agent, bank, broker, nominee, custodian or trustee
for one or more beneficial owners who do not individually or as a
group have control of such corporation.
(9) "Exchange
Act" means the United States law known as the Securities Exchange
Act of 1934, as the same has been or hereafter may be amended from
time to time.
(10)
"Interested shareholder", when used in reference to any
resident domestic corporation, means any person (other than such resident
domestic corporation or any subsidiary of such resident domestic corporation)
that
(A)
(i)
is the beneficial owner, directly or indirectly, of twenty percent
or more of the outstanding voting stock of such resident domestic
corporation; or
(ii)
is an affiliate or associate of such resident domestic corporation
and at any time within the five-year period immediately prior
to the date in question was the beneficial owner, directly or
indirectly, of twenty percent or more of the then outstanding
voting stock of such resident domestic corporation; provided that
(B)
for the purpose of determining whether a person is an interested
shareholder, the number of shares of voting stock of such resident
domestic corporation deemed to be outstanding shall include shares
deemed to be beneficially owned by the person through application
of subparagraph four of the paragraph but shall not include any
other unissued shares of voting stock of such resident domestic
corporation which may be issuable pursuant to any agreement, arrangement
or understanding, or upon exercise of conversion rights, warrants
or options, or otherwise.
(11)
"Market value", when used in reference to stock or property
of any resident domestic corporation, means:
(A)
in the case of stock, the highest closing sale price during the
thirty-day period immediately preceding the date in question of
a share of such stock on the composite tape for New York stock exchange-listed
stocks, or, if such stock is not quoted on such composite tape or
if such stock is not listed on such exchange, on the principal United
States securities exchange registered under the Exchange Act on
which such stock is listed, or, if such stock is not listed on any
such exchange, the highest closing bid quotation with respect to
a share of such stock during the thirty-day period preceding the
date in question on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if
no such quotations are available, the fair market value on the date
in question of a share of such stock as determined by the board
of directors of such resident domestic corporation in good faith;
and
(B)
in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by
the board of directors of such resident domestic corporation in
good faith.
(12)
"Preferred stock" means any class or series of stock of
a resident domestic corporation which under the by-laws or certificate
of incorporation of such resident domestic corporation is entitled
to receive payment of dividends prior to any payment of dividends
on some other class or series of stock, or is entitled in the event
of any voluntary liquidation, dissolution or winding up of the resident
domestic corporation to receive payment or distribution of a preferential
amount before any payments or distributions are received by some other
class or series of stock.
(13)
"Resident domestic corporation" means an issuer of voting
stock which:
(A)
is organized under the laws of the Nation;
(B)
either (i) has its principal executive offices and significant business
operations located within the territorial jurisdiction of the Nation;
and
(C)
has at least ten percent of its voting stock owned beneficially
by persons residing within the territorial jurisdiction of the Nation.
For purposes of this section, the residence of a partnership, unincorporated
association, trust or similar organization shall be the principal
office of such organization.
No resident
domestic Corporation, which is organized under the laws of the Nation,
shall cease to be a resident domestic corporation by reason of events
occurring or actions taken while such resident domestic corporation
is subject to the provisions of this section.
(14)
"Stock" means:
(A)
any stock or similar security, any certificate of interest, any
participation in any profit sharing agreement, any voting trust
certificate, or any certificate of deposit for stock; and
(B)
any security convertible, with or without consideration, into stock,
or any warrant, call or other option or privilege of buying stock
without being bound to do so, or any other security carrying any
right to acquire, subscribe to or purchase stock.
(15)
"Stock acquisition date", with respect to any person and
any resident domestic corporation, means the date that such person
first becomes an interested shareholder of such resident domestic
corporation.
(16)
"Subsidiary" of any person means any other corporation of
which a majority of the voting stock is owned, directly or indirectly,
by such person.
(17)
"Voting stock" means shares of capital stock of a corporation
entitled to vote generally in the election of directors.
(b) Notwithstanding
anything to the contrary contained in the chapter (except the provisions
of paragraph (d) of this section), no resident domestic corporation
shall engage in any business combination with any interested shareholder
of such resident domestic corporation for a period of five years following
such interested shareholder's stock acquisition date unless such business
combination or the purchase of stock made by such interested shareholder
on such interested shareholder's stock acquisition date is approved
by the board of directors of such resident domestic corporation prior
to such interested shareholder's stock acquisition date. If a good faith
proposal is made in writing to the board of directors of such resident
domestic corporation regarding a business combination, the board of
directors shall respond, in writing, within thirty days or such shorter
period, if any, as may be required by the United States Exchange Act,
setting forth its reasons for its decision regarding such proposal.
If a good faith proposal to purchase stock is made in writing to the
board of directors of such resident domestic Corporation, the board
of directors, unless it responds affirmatively in writing thirty days
or such shorter period, if any, as may be required by the United States
Exchange Act, shall be deemed to have disapproved such stock purchase.
(c) Notwithstanding
anything to the contrary contained in the chapter (except the provisions
of paragraphs (b) and (d) of this section), no resident domestic corporation
shall engage at any time in any business combination with any interested
shareholder of such resident domestic corporation other than a business
combination specified in any one of subparagraph (l), (2) or (3):
(1) A
business combination approved by the board of directors of such resident
domestic corporation prior to such interested shareholder's stock
acquisition date, or where the purchase of stock made by such interested
shareholder on such interested shareholder's stock acquisition date
had been approved by the board of directors of such resident domestic
corporation prior to such interested shareholder's stock acquisition
date.
(2) A
business combination approved by the affirmative vote of the holders
of a majority of the outstanding voting stock not beneficially owned
by such interested shareholder or any affiliate or associate of such
interested shareholder at a meeting called for such purpose no earlier
than five years after such interested shareholder's stock acquisition
date.
(3) A
business combination that meets all of the following conditions:
(A)
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 such
resident domestic corporation in such business combination is at
least equal to the higher of the following:
(i)
the highest per share price paid by such interested shareholder
at a time when he was the beneficial owner, directly or indirectly,
of five percent or more of the outstanding voting stock of such
resident domestic corporation, for any shares of common stock
of the same class or series acquired by it (X) within the five-year
period immediately prior to the announcement date with respect
to such business combination, or (Y) within the five-year period
immediately prior to, or in, the transaction in which such interested
shareholder became an interested shareholder, whichever is higher;
plus, in either case, interest compounded annually from the earlier
date on which such 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 such earliest date, up to the amount of such interest;
and
(ii)
the market value per share of common stock on the announcement
date with respect to such business combination or on such interested
shareholder’s stock acquisition date, whichever is higher;
plus interest compounded annually from such 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 such date,
up to the amount of such interest.
(B)
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 such resident domestic corporation
is at least equal to the highest of the following (whether or not
such interested shareholder has previously acquired any shares of
such class or series of stock):
(i)
the highest per share price paid by such interested shareholder
at a time when he was the beneficial owner, directly or indirectly,
of five percent or more of the outstanding voting stock of such
resident domestic corporation, for any shares of such class or
series of stock acquired by it (X) within the five-year period
immediately prior to the announcement date with respect to such
business combination, or (Y) within the five-year period immediately
prior to, or in, the transaction in which such interested shareholder
became an interested shareholder, whichever is higher; plus, in
either case, interest compounded annually from the earliest date
on which such 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 such class or series of
stock since such earliest date, up to the amount of such interest;
(ii)
the highest preferential amount per share to which the holders
of shares of such class or series of stock are entitled in the
event of any voluntary liquidation, dissolution or winding up
of such resident domestic corporation, plus the aggregate amount
of any dividends declared or due as to which such holders are
entitled prior to payment of dividends on some other class or
series of stock (unless the aggregate amount of such dividends
is included in such preferential amount); and
(iii)
the market value per share of such class or series of stock on
the announcement date with respect to such business combination
or on such interested shareholder's stock acquisition date, whichever
is higher; plus interest compounded annually from such 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 such class or series of
stock since such date, up to the amount of such interest.
(C)
The consideration to be received by holders of a particular class
or series of outstanding stock (including common stock) of such
resident domestic corporation in such business combination is in
cash or in the same form as the interested shareholder has used
to acquire the largest number of shares of such class of series
of stock previously acquired by it, and such consideration shall
be distributed promptly.
(D)
The holders of all outstanding shares of stock of such resident
domestic corporation not beneficially owned by such interested shareholder
immediately prior to the consummation of such business combination
are entitled to receive in such business combination cash or other
consideration for such shares in compliance with clauses (A), (B)
and (C) of this subparagraph.
(E)
After such interested shareholder's stock acquisition date and prior
to the consummation date with respect to such business combination,
such interested shareholder has not become the beneficial owner
of any additional shares of voting stock of such resident domestic
corporation except:
(i)
as part of the transaction which resulted in such interested shareholder
becoming an interested shareholder;
(ii)
by virtue of proportionate stock splits, stock dividends or other
distributions of stock in respect of stock not constituting a
business combination under clause (E) of subparagraph five of
paragraph (a) of this section;
(iii)
through a business combination meeting all of the conditions of
paragraph (b) of this section and this paragraph; or
(iv)
through purchase by such interested shareholder at any price which,
if such price had been paid in an otherwise permissible business
combination the announcement date and consummation date of which
were the date of such purchase, would have satisfied the requirements
of clauses (A), (B) and (C) of this subparagraph.
(d) The
provisions of this section shall not apply:
(1) to
any business combination of a resident domestic corporation that does
not have a class of voting stock registered with the United States
Securities and Exchange Commission pursuant to section twelve of the
United States Exchange Act, unless the certificate of incorporation
provides otherwise; or
(2) to
any business combination of a resident domestic corporation whose
certificate of incorporation has been amended to provided that such
resident domestic corporation shall be subject to the provisions of
this section, which did not have a class of voting stock registered
with the United States Securities and Exchange Commission pursuant
to section twelve of the United States Exchange Act on the effective
date of such amendment, and which is a business combination with an
interested shareholder whose stock acquisition date is prior to the
effective date of such amendment; or
(3) to
any business combination of a resident domestic corporation (i) the
original certificate of incorporation of which contains a provision
expressly electing not to be governed by this section, or (ii) which
adopts an amendment to such resident domestic corporation's by-laws,
approved by the affirmative vote of the holders, other than interested
shareholders and their affiliates and associates, of a majority of
the outstanding voting stock of such resident domestic corporation,
excluding the voting stock of interested shareholders and their affiliates
and associates, expressly electing not to be governed by this section,
provided that such amendment to the by-laws shall not be effective
until eighteen months after such vote of such resident domestic corporation's
shareholders and shall not apply to any business combination of such
resident domestic corporation with an interested shareholder whose
stock acquisition date is on or prior to the effective date of such
amendment; or
(4) to
any business combination of a resident domestic corporation with an
interested shareholder of such resident domestic corporation which
became an interested shareholder inadvertently, if such interested
shareholder (i) as soon as practicable, divests itself of a sufficient
amount of the voting stock of such resident domestic corporation so
that it no longer is the beneficial owner, directly or indirectly,
of twenty percent or more of the outstanding voting stock of such
resident domestic corporation, an (ii) would not at any time within
the five-year period preceding the announcement date with respect
to such business combination have been an interested shareholder but
for such inadvertent acquisition.
913. SHARE EXCHANGES
(a)
(1) Two
domestic corporations may, as provided in this section, participate
in the consummation of a plan for binding share exchanges.
(2)Whenever
used in this chapter:
(A)
"Acquiring corporation" means a corporation that is participating
in a procedure pursuant to which such corporation is acquiring all
of the outstanding shares of one or more classes of a subject corporation.
(B)
"Subject corporation'' means a corporation that is participating
in a procedure pursuant to which all of the outstanding shares of
one or more classes of such corporation are being acquired by an
acquiring corporation.
(b) The
board of the acquiring corporation and the board of the subject corporation
shall adopt a plan of exchange, setting forth:
(1) The
name of the acquiring corporation and the name of the subject corporation,
and, if the name of either of them has been changed, the name under
which it was formed;
(2) As
to the acquiring corporation and the subject corporation, the designation
and number of outstanding shares of each class and series, specifying
the classes and series entitled to vote and further specifying each
class and series, if any, entitled to vote as a class; and, if the
number of any such shares is subject to change prior to the effective
date of the exchange, the manner in which such change may occur;
(3) The
terms and conditions of the proposed exchange, including the manner
and basis of exchanging the shares to be acquired for shares, bonds
or other securities of the acquiring corporation, or the cash or other
consideration to be paid or delivered in exchange for such shares
to be acquired, or a combination thereof; and
(4) Such
other provisions with respect to the proposed exchange as the board
considers necessary or desirable.
(c) The
board of the subject corporation, upon adopting the plan of exchange,
shall submit such plan, except as provided in paragraph (g) of this
section, to a vote of shareholders in accordance with the following:
(1) Notice
of meeting shall be given to each shareholder of record, as of the
record date fixed pursuant to section 604 (Fixing record date), whether
or not entitled to vote. A copy of the plan of exchange or an outline
of the material features of the plan shall accompany such notice.
(2) The
plan of exchange shall be adopted at a meeting of shareholders by
vote of the holders of two-thirds of all outstanding shares entitled
to vote thereon. Notwithstanding any provision in the certificate
of incorporation, the holders of shares of a class or series shall
be entitled to vote and to vote as a class if the plan of exchange
contains any provision which, if contained in an amendment to the
certificate of incorporation, would entitle the holders of shares
of such class or series to vote as a class thereon, or if the shares
of such class or series are to be exchanged pursuant to the plan of
exchange. In such case, in addition to the authorization of the exchange
by vote of the holders of two-thirds of all outstanding shares entitled
to vote thereon, the exchange shall be authorized by vote of the holders
of a majority of all outstanding shares of each such class or series.
Notwithstanding shareholder authorization and at any time prior to
the filing of the certificate of exchange, the plan of exchange may
be abandoned pursuant to a provision for such abandonment, if any,
contained in the plan of exchange.
(d) After
adoption of the plan of exchange by the board of the acquiring corporation
and the board of the subject corporation and by the shareholders of
the subject corporation entitled to vote thereon, unless the exchange
is abandoned in accordance with paragraph (c), a certificate of exchange,
entitled "Certificate of exchange of shares of ..........., subject
corporation, for shares of ......., acquiring corporation, or other
consideration, under section 913 of the Business Corporation Code",
shall be signed and verified on behalf of each corporation and delivered
to the Nation Clerk. It shall set forth:
(1) the
statements required by subparagraphs (1) and (2) of paragraph (b)
of this section;
(2) the
effective date of the exchange if other than the date of filing of
the certificate of exchange by the Nation Clerk;
(3) the
date when the certificate of incorporation of each corporation was
filed by the Nation Clerk;
(4) the
designation of the shares to be acquired by the acquiring corporation
and a statement of the consideration for such shares; and
(5) the
manner in which the exchange was authorized with respect to each corporation.
(e) Upon
the filing of the certificate of exchange by the Nation Clerk or on
such date subsequent thereto, not to exceed thirty days, as shall be
set forth in such certificate, the exchange shall be effected. When
such exchange has been effected, ownership of the shares to be acquired
pursuant to the plan of exchange shall vest in the acquiring corporation,
whether or not the certificates for such shares have been surrendered
for exchange, and the acquiring corporation shall be entitled to have
new certificates registered in its name or at its direction. Shareholders
whose shares have been so acquired shall become entitled to the shares,
bonds or other securities of the acquiring corporation, or the cash
or other consideration, required to be paid or delivered in exchange
for such shares pursuant to the plan. Subject to any terms of the plan
regarding surrender of certificates thereto evidencing the shares so
acquired and regarding whether such certificates shall thereafter evidence
securities of the acquiring corporation, such certificates shall thereafter
evidence only the right to receive the consideration required to be
paid or delivered in exchange for such shares pursuant to the plan,
or, in the case of dissenting shareholders, their rights under section
910 (Right of shareholder to receive payment for shares upon merger
or consolidation, or sale, lease, exchange or other disposition of assets,
or share exchange) and section 623 (Procedure to enforce shareholder's
right to receive payment for shares).
(f)
(1) a
foreign corporation and a domestic corporation may participate in
a share exchange, but, if the subject corporation is a foreign corporation,
only if such exchange is permitted by the laws of the jurisdiction
under which such foreign corporation is incorporated. With respect
to such exchange, any reference in subparagraph (2) of paragraph (a)
of this section to a corporation shall, unless the context otherwise
requires, include both domestic and foreign corporations, and the
provisions of paragraphs (b), (c), (d) and (e) of this section shall
apply, except to the extent otherwise provided in this paragraph.
(2) With
respect to procedure, including the requirement of shareholder authorization,
a domestic corporation shall comply with the provisions of this chapter
relating to share exchanges in which domestic corporations are participating,
and a foreign corporation shall comply with the applicable provisions
of the law of the jurisdiction under which it is incorporated.
(3) If
the subject corporation is a foreign corporation, the certificate
of exchange shall set forth, in addition to the matters specified
in paragraph (d), the jurisdiction and date of incorporation of such
corporation and a statement that the exchange is permitted by the
laws of the jurisdiction of such corporation and is in compliance
therewith.
(g)
(1) Any
corporation owning at least ninety percent of the outstanding common
shares, having full voting rights, of another corporation may acquire
by exchange the remainder of such outstanding common shares, without
the authorization of the shareholders of any such corporation and
with the effect provided for in paragraph (e) of this section. The
board of the acquiring corporation shall adopt a plan of exchange,
setting forth the matters specified in paragraph (b) of this section.
A copy of such plan of exchange or an outline of the material features
thereof shall be given, personally or by mail, to all holders of shares
of the subject corporation that are not owned by the acquiring corporation,
unless the giving of such copy or outline has been waived by such
holders.
(2) A
certificate of exchange, entitled "Certificate of exchange of
shares of ....., subject corporation, for shares of ....., acquiring
corporation, or other consideration, under paragraph (g) of section
913 of the Business Corporation Code" and complying with the
provisions of paragraph (d) and, if applicable, subparagraph (3) of
paragraph (f) shall be signed, verified and delivered to the Nation
Clerk by the acquiring corporation, but not less than thirty days
after the giving of a copy or outline of the material features of
the plan of exchange to shareholders of the subject corporation, or
at any time after the waiving thereof by the holders of all the outstanding
shares of the subject corporation not owned by the acquiring corporation.
(3) The
right of exchange of shares granted by this paragraph to certain corporations
shall not preclude the exercise by such corporations of any other
right of exchange under this chapter.
(4) The
procedure for the exchange of shares of a subject corporation under
this paragraph (g) of this section shall be available where either
the subject corporation or the acquiring corporation is a foreign
corporation, and, in case the subject corporation is a foreign corporation,
where such exchange is permitted by the laws of the jurisdiction under
which such foreign corporation is incorporated.
(h) This
section does not limit the power of a domestic or foreign corporation
to acquire all or part of the shares of one or more classes of another
domestic or foreign corporation by means of a voluntary exchange or
otherwise.
(i)
(1) A
binding share exchange pursuant to this section shall constitute a
"business combination'' pursuant to section nine hundred twelve
of this chapter (Requirements relating to certain business combinations)
if the subject corporation is a "resident domestic corporation''
and the acquiring corporation is an "interested shareholder"
of the subject corporation, as such terms are defined in section nine
hundred twelve of this chapter.
(2) With
respect to convertible securities and other securities evidencing
a right to acquire shares of a subject corporation, a binding share
exchange pursuant to this section shall have the same effect on the
rights of the holders of such securities as a merger of the subject
corporation.
CHAPTER 10 - NON-JUDICIAL DISSOLUTION
1001. AUTHORIZATION OF DISSOLUTION
A corporation
may be dissolved under this chapter. Such dissolution shall be authorized
at a meeting of shareholders by the vote of the holders of two-thirds
of all outstanding shares entitled to vote thereon, except as otherwise
provided under section 1002 (Dissolution under provision in certificate
of incorporation).
1002. DISSOLUTION UNDER PROVISION IN CERTIFICATE OF INCORPORATION
(a) The
certificate of incorporation may contain a provision that any shareholder,
or the holders of any specified number or proportion of shares, or of
any specified number or proportion of shares of any class or series
thereof, may require the dissolution of the corporation at will or upon
the occurrence of a specified event. If the certificate of incorporation
contains such a provision, a certificate of dissolution under section
1003 (Certificate of dissolution; contents) may be signed, verified
and delivered to the Nation Clerk as provided in section 104 (Certificate;
requirements, signing, filing, effectiveness) when authorized by a holder
or holders of the number or proportion of shares specified in such provision,
given in such manner as may be specified therein, or if no manner is
specified therein, when authorized on written consent signed by such
holder or holders; or such certificate may be signed, verified and delivered
to the Nation Clerk by such holder or holders or by such of them as
are designated by them.
(b) An
amendment of the certificate of incorporation which adds a provision
permitted by this section, or which changes or strikes out such a provision,
shall be authorized at a meeting of shareholders by vote of all outstanding
shares, whether or not otherwise entitled to vote on any amendment,
or of such lesser proportion of shares and of such class or series of
shares, but not less than a majority of all outstanding shares entitled
to vote on any amendment, as may be provided specifically in the certificate
of incorporation for adding, changing or striking out a provision permitted
by this section.
(c) If
the certificate of incorporation of any corporation contains a provision
authorized by this section, the existence of such provision shall be
noted conspicuously on the face or back of every certificate for shares
issued by such corporation.
1003. CERTIFICATE OF DISSOLUTION; CONTENTS
(a) A certificate
of dissolution, entitled "Certificate of dissolution of .... (name
of corporation) under section 1003 of the Business Corporation Code",
shall be signed, verified and delivered to the Nation Clerk. It shall
set forth:
(1) The
name of the corporation and, if its name has been changed, the name
under which it was formed.
(2) The
date its certificate of incorporation was filed by the Nation Clerk.
(3) The
name and address of each of its officers and directors.
(4) That
the corporation elects to dissolve.
(5) The
manner in which the dissolution was authorized.
1004. CERTIFICATE OF DISSOLUTION; FILING
The Nation
Clerk shall not file such certificate unless all Nation taxes have been
paid. Upon payment of all Nation taxes, or a statement from the Chief
Financial Officer of the Nation that no taxes are due, the certificate
shall be filed.
1005. PROCEDURE AFTER DISSOLUTION
(a) After
dissolution:
(1) The
corporation shall carry on no business except for the purpose of winding
up its affairs.
(2) The
corporation shall proceed to wind up its affairs, with power to fulfill
or discharge its contracts, collect its assets, sell its assets for
cash at public or private sale, discharge or pay its assets for cash
at public or private sale, discharge or pay its liabilities, and do
all other acts appropriate to liquidate its business.
(3) After
payment or adequately providing for the payment of its liabilities:
(A)
The corporation, if authorized at a meeting of shareholders by a
vote of the holders of a majority of all outstanding shares entitled
to vote thereon may sell its remaining assets, or any part thereof,
for cash, shares, bonds or other securities or partly for cash and
partly for shares, bonds or other securities, and distribute the
same among the shareholders according to their respective rights.
In the case of a sale under this subparagraph where the consideration
is in whole or in part other than cash, any shareholder, entitled
to vote thereon, who does not vote for or consent in writing to
such sale, thereon, who does not vote for or consent in writing
to such sale, shall, subject to and by complying with the provisions
of section 623 (Procedure to enforce shareholder’s right to
receive payment for shares), have the right to receive payment for
his shares. Section 909 (Sale, lease, exchange or other disposition
of assets) is not applicable to a sale of assets under this paragraph.
(B)
The corporation, whether or not it has made a sale under subparagraph
(A), may distribute any remaining assets, in cash or in kind or
partly each, among its shareholders according to their respective
rights.
(b) When
there are no shareholders, upon dissolution all subscriptions for shares
shall be canceled and all obligations of the corporation to issue shares
or of the subscribers to pay their subscriptions shall terminate, except
for such payments as may be required to enable the corporation to pay
its liabilities.
(c) Upon
the winding up of the affairs of the corporation, any assets distributable
to a creditor or shareholder who is unknown or cannot be found, or who
is under disability and for whom there is no legal representative, shall
be paid to the Nation as payment of the final liquidating distribution,
and be subject to the provisions of the abandoned property law.
1006. CORPORATE ACTION AND SURVIVAL OF REMEDIES AFTER DISSOLUTION
(a) A dissolved
corporation, its directors, officers and shareholders may continue to
function for the purpose of winding up the affairs of the corporation
in the same manner as if the dissolution had not taken place, except
as otherwise provided in this chapter or by court order. In particular,
and without limiting the generality of the foregoing:
(1) The
directors of a dissolved corporation shall not be deemed to be trustees
of its assets; title to such assets shall not vest in them, but shall
remain in the corporation until transferred by it in its corporate
name.
(2) Dissolution
shall not change quorum or voting requirements for the board of shareholders,
or provisions regarding election, appointment, resignation or removal
of, or filling vacancies among, directors or officers, of provisions
regarding amendment or repeal of by-laws or adoption of new by-laws.
(3) Shares
may be transferred and determinations of shareholders for any purpose
may be made without closing the record of shareholders until such
time, if any, as such record may be closed, and either the board or
the shareholders may close it.
(4) The
corporation may sue or be sued in all courts and participate in actions
and proceedings, whether judicial, administrative, arbitrative or
otherwise, in its corporate name, and process may be served by or
upon it.
(b) The
dissolution of a corporation shall not affect any remedy available to
or against such corporation, its directors, officers or shareholders
for any right or claim existing or any liability incurred before such
dissolution, except as provided in sections 1007 (Notice to creditors;
filing or barring claims) or 1008 (Jurisdiction of Nation court to supervise
dissolution and liquidation).
1007. NOTICE TO CREDITORS; FILING OR BARRING CLAIMS
(a) At
any time after dissolution, the corporation may give a notice requiring
all creditors and claimants, including any with unliquidated or contingent
claims and any with whom the corporation has unfulfilled contracts,
to present their claims in writing and in detail at a specified place
and by a specified day, The giving of such notice shall not constitute
a recognition that any person is a proper creditor or claimant, and
shall not revive or make valid, or operate as a recognition of the validity
of, or a waiver of any defense or counterclaim in respect of any claim
against the corporation, its assets, directors, officers or shareholders,
which has been barred by any statute of limitations or become invalid
by any cause, or in respect of which the corporation, its directors,
officers or shareholders, has any defense or counterclaim.
(b) Any
claims which shall have been filed as provided in such notice and which
shall be disputed by the corporation may be submitted for determination
to the Nation court. A claim filed by the trustee or paying agent for
the holders of bonds or coupons shall have the same effect as if filed
by the holder of any such bond or coupon. Any person whose claim is,
barred by any statute of limitations is not a creditor or claimant entitled
to any notice under this section or section 1008. The claim of any such
person and all other claims which are not timely filed as provided in
such notice except claims which are the subject of litigation, and all
claims which are so filed but are disallowed by the court under section
1008, shall be forever barred as against the corporation, its assets,
directors, officers and shareholders, except to such extent, if any,
as the court may allow them against any remaining assets of the corporation
in the case of a creditor who shows satisfactory reason for his failure
to file his claim as so provided.
(c) Notwithstanding
this section and section 1008 tax claims and other claims of the Nation,
another Indian Nation, any state and of the United States shall not
be required to be filed under those sections, and such claims shall
not be barred because not so filed, and distribution of the assets of
the corporation, or any part thereof, may be deferred until determination
of any such claims.
(d) Laborer's
wages shall be preferred claims and entitled to payment before any other
creditors out of the assets of the corporation in excess of valid prior
liens or encumbrances.
1008. JURISDICTION OF ONEIDA NATION COURT TO SUPERVISE DISSOLUTION
AND LIQUIDATION
(a) At
any time after the filing of a certificate of dissolution under this
chapter the Nation court, in a special proceeding instituted under this
section, upon the petition of the corporation, or, in a situation approved
by the court, upon the petition of a creditor, claimant, director, officer,
shareholder, subscriber for shares, incorporator or the Nation Prosecutor,
may suspend or annul the dissolution or continue the liquidation of
the corporation under the supervision of the court and may make all
such order as it may deem proper in all matters in connection with the
dissolution or the winding Lip of the affairs of the corporation, and
in particular, and without limitation of the generality thereof, in
respect of the following:
(1) The
determination of the validity of the authorization of the dissolution
of the corporation and of the execution and delivery of the certificate
of dissolution under this chapter.
(2) The
adequacy of the notice given to creditors and claimants and if it
is determined to have been inadequate, the requirement of such further
notice as the court may deem proper .
(3) The
determination of the validity and amount or invalidity of any claims
which have been presented to the corporation.
(4) The
barring of all creditors and claimants who have not timely filed claims
as provided in any such notice, or whose claims have been disallowed
by the court, as against the corporation, its assets, directors, officers
and shareholders.
(5) The
determination and enforcement of the liability of any director, officer,
shareholder or subscriber for shares, to the corporation or for the
liabilities of the corporation.
(6) The
payment, satisfaction or compromise of claims against the corporation,
the retention of assets for such purpose, and the determination of
the adequacy of provisions made for payment of the liabilities of
the corporation.
(7) The
disposition or destruction of records, documents and papers of the
corporation.
(8) The
appointment and removal of a receiver under chapter 12 (Receivership)
who may be a director, officer or shareholder of the corporation.
(9) The
issuance of injunctions for one or more of the purposes and as provided
in section 1115 (Injunction).
(10)
The return of subscription payments to subscribers for shares, and
the making of distributions, in cash or in kind or partly each, to
the shareholders.
(11)
The payment to the Oneida Indian Nation, as abandoned property, of
assets under paragraph (c) of section 1005 (Procedure after dissolution).
(b) Orders
under this section may be entered ex parte, except that if such special
proceeding was not instituted upon petition of the corporation, notice
shall be given to the corporation in such manner as the court may direct.
Notice shall be given to such other persons interested, and in such
manner, as the court may deem proper, of any hearings and of the entry
of any orders on such matters as the court shall deem proper. All orders
made by the court under this section shall be binding upon the Nation,
the corporation, its officers, directors, shareholders, subscribers
for shares, incorporators, creditors and claimants.
(c)
(1) Simultaneously
with the institution of such special proceeding for annulment of the
dissolution, the petitioner shall apply to the Nation Clerk to reserve
the corporation name to the corporation. If such name shall not be
available for use, the petitioner forthwith upon being notified thereof
shall apply to such department for the reservation of another and
available name and any judgment or order of annulment made in such
proceeding shall order and direct the petitioner to execute a certificate
of change of the corporate name to such other name.
(2) The
clerk of the court, shall transmit a certified copy of the judgment
or order of annulment of the dissolution, together with the certificate
of change of corporate name in the appropriate case, to the Nation
Clerk. Upon filing by the Nation Clerk, the annulment of dissolution
shall be effected.
1009. APPLICABILITY TO DISSOLUTION UNDER OTHER PROVISIONS
The provisions
of sections 1005 (Procedure after dissolution), 1006 (Corporate action
and survival of remedies after dissolution), 1007 (Notice to creditors;
filing or barring claims) and 1008 (Jurisdiction of Nation court to
supervise dissolution and liquidation) shall apply to a corporation
dissolved by expiration of its period of duration.
CHAPTER 11 - JUDICIAL DISSOLUTION
1101. NATION PROSECUTOR'S ACTION FOR JUDICIAL DISSOLUTION
(a) The
Nation Prosecutor may bring an action for the dissolution of a corporation
upon one or more of the following grounds:
(1) That
the corporation procured its formation through fraudulent misrepresentation
or concealment of a material fact.
(2) That
the corporation has exceeded the authority conferred upon it by law,
or has violated any provision of law whereby it has forfeited its
charter, or carried on, conducted or transacted its business in a
persistently fraudulent or illegal manner, or by the abuse of its
powers contrary to the public policy of the state has become liable
to be dissolved.
(b) The
enumeration in paragraph (a) of grounds for dissolution shall not exclude
actions or special proceedings by the Nation Prosecutor for the annulment
or dissolution of a corporation for other causes as provided in this
chapter or in any other Nation statute.
1102. DIRECTORS' PETITION FOR JUDICIAL DISSOLUTION
If a majority
of the board adopts a resolution that finds that the assets of a corporation
are not sufficient to discharge its liabilities or that a dissolution
will be beneficial to the shareholders, it may present a petition to
the Nation Court for its dissolution.
1103. SHAREHOLDERS' PETITION FOR JUDICIAL DISSOLUTION
(a) If
the shareholders of a corporation adopt a resolution stating that they
find that its assets are not sufficient to discharge its liabilities,
or that they deem a dissolution to be beneficial to the shareholders,
the shareholders or such of them as are designated for that purpose
in such resolution may present a petition to the Nation Court for its
dissolution.
(b) A shareholders'
meeting to consider such a resolution may be called, notwithstanding
any provision in the certificate of incorporation, by the holders of
ten percent of all outstanding shares entitled to vote thereon, or if
the certificate of incorporation authorizes a lesser proportion of shares
to call the meeting, by such lesser proportion. A meeting under this
paragraph may not be called more often than once in any period of twelve
consecutive months.
(c) Such
a resolution may be adopted at a meeting of shareholders by vote of
the holders of a majority of all outstanding shares entitled to vote
thereon or if the certificate of incorporation requires a greater proportion
of votes to adopt such a resolution, by such a greater proportion.
1104. PETITION IN CASE OF DEADLOCK AMOUNT DIRECTORS OR SHAREHOLDERS
(a) Except
as otherwise provided in the certificate of incorporation under section
613 (Limitations on right to vote), the holders of one-half of all outstanding
shares of a corporation entitled to vote in an election of directors
may present a petition for dissolution on one or more of the following
grounds:
(1) That
the directors are so divided respecting the management of the corporation's
affairs that the votes required for action by the board cannot be
obtained,
(2) That
the shareholders are so divided that the votes required for the election
of directors cannot be obtained.
(3) That
there is internal dissension and two or more factions of shareholders
are so divided that dissolution would be beneficial to the shareholders.
(b) If
the certificate of incorporation provided that the proportion of votes
required for action by the board, or the proportion of votes of shareholders
required for election of directors, shall be greater than that otherwise
required by this chapter, such a petition may be presented by the holders
of more than one-third of all outstanding shares entitled to vote on
non-judicial dissolution under section 1001 (Authorization of dissolution).
(c) Notwithstanding
any provision in the certificate of incorporation, any holder of shares
entitled to vote at an election of directors of a corporation, may present
a petition for its dissolution on the ground that the shareholders are
so divided that they have failed, for a period which includes at least
two consecutive annual meeting dates, to elect successors to directors
whose terms have expired or would have expired upon the election and
qualification of their successors.
1104-A. PETITION FOR JUDICIAL DISSOLUTION UNDER SPECIAL CIRCUMSTANCES
(a) The
holders of twenty percent or more of all outstanding shares of a corporation,
other than a corporation registered as an investment company under the
United States law "Investment Company Act of 1940", no shares
of which are listed on a national securities exchange or regularly quoted
in an over-the-counter market by one or more members of a national or
an affiliated securities association, who are entitled to vote in an
election of directors may present a petition of dissolution on one or
more of the following grounds:
(1) The
directors or those in control of the corporation have been guilty
of illegal, fraudulent or oppressive actions toward the complaining
shareholders;
(2) The
property or assets of the corporation are being looted, wasted, or
diverted for non-corporate purposes by its directors, officers or
those in control of the corporation.
(b) The
court, in determining whether to proceed with involuntary dissolution
pursuant to this section, shall take into account:
(1) Whether
liquidation of the corporation is the only feasible means whereby
the petitioners may reasonably expect to obtain a fair return on their
investment; and
(2) Whether
liquidation of the corporation is reasonably necessary for the protection
of the rights and interests of any substantial number of shareholders
or of the petitioners.
(c) In
addition to all other disclosure requirements, the directors or those
in control of the Corporation, no later than thirty days after the filing
of a petition hereunder, shall make available for inspection and copying
to the petitioners under reasonable working conditions the corporate
financial books and records for the three preceding years.
(d) The
court may order stock valuations be adjusted and may provide for a surcharge
upon the directors or those in control of the corporation upon a finding
of willful or reckless dissipation or transfer of assets or corporate
property without just or adequate compensation therefore.
1105. CONTENTS OF PETITION FOR JUDICIAL, DISSOLUTION
A petition
for dissolution shall specify the