Arizona Laws 10-2704. Limitation on share repurchases; definition
A. An issuing public corporation shall not, directly or indirectly, purchase or agree to purchase any shares from a beneficial owner of more than five per cent of the voting power of the issuing public corporation for more than the average market price of the shares if the shares have been beneficially owned by the beneficial owner for less than three years, unless either:
Terms Used In Arizona Laws 10-2704
- beneficially owned: when used with respect to shares, refers to any of the following:
(a) A person who, directly or indirectly through any agreement, arrangement, relationship, understanding or otherwise, whether or not in writing, has or shares the power to vote, or direct the voting of the shares, or has or shares the power to dispose of or direct the disposition of the shares, except that:
(i) A person is not deemed the beneficial owner of shares tendered pursuant to a tender or exchange offer made by the person or any of the person's affiliates or associates until the tendered shares are accepted for purchase or exchange. See Arizona Laws 10-2701
- Board of directors: means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which the group is designated and includes the governing body or bodies of a water users' association if the articles of incorporation of the water users' association provide for a governing body or bodies denominated other than as a board of directors. See Arizona Laws 10-140
- Class: refers to a group of memberships that have the same rights with respect to voting, dissolution, redemption and transfer. See Arizona Laws 10-3140
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Issuing public corporation: means a corporation that has a class of equity securities registered pursuant to section 12 or is subject to section 15(d) of the securities exchange act of 1934 or has elected to be subject to all or part of this chapter pursuant to section 10-2706 and which either:
(a) Is incorporated under the laws of this state. See Arizona Laws 10-2701
- Person: means an individual, a corporation, a partnership, a syndicate, an association, a joint stock company, a trust in which the interests of the beneficiaries are evidenced by securities, an unincorporated organization or entity or a government or political subdivision of a government. See Arizona Laws 10-2701
- Shares: means those shares presently entitled to vote in the election of directors of the issuing public corporation. See Arizona Laws 10-2701
- Tender offer: means a tender offer under the securities exchange act of 1934. See Arizona Laws 10-2701
- United States: includes a district, authority, bureau, commission and department and any other agency of the United States. See Arizona Laws 10-140
- Vote: includes authorization by written ballot and written consent. See Arizona Laws 10-3140
- Voting power: means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote that is contingent on the happening of a condition or event that has not occurred at the time. See Arizona Laws 10-3140
1. The purchase or agreement to purchase is approved at a meeting of shareholders by the affirmative vote of the holders of a majority of the voting power of all shares excluding shares beneficially owned by the beneficial owner or its affiliates or associates or by any officer or director of the issuing public corporation.
2. The issuing public corporation makes an offer, of at least equal value per share, to all holders of shares of such class or series and to all holders of any class or series into which the shares may be converted.
B. For the purposes of this section, "average market price" means the average closing sale price during the thirty trading days immediately preceding the purchase of the shares in question, or if the person or persons have commenced a tender offer or have announced an intention to seek control of the issuing public corporation, during the thirty trading days preceding the earlier of the commencement of the tender offer or the making of the announcement, of a share on the composite tape for New York stock exchange listed shares or, if the shares are not quoted on the composite tape or not listed on the New York stock exchange, on the principal United States securities exchange registered under the securities exchange act of 1934 on which the shares are listed or, if the shares are not listed on any such exchange, on the national association of securities dealers, inc. automated quotations national market system or, if the shares are not quoted on the national association of securities dealers, inc. automated quotations national market system, the average closing bid quotation, during the thirty trading days preceding the purchase of the shares in question of a share on the national association of securities dealers, inc. automated quotations system or any system then in use, or if the person or persons have commenced a tender offer or have announced an intention to seek control of the issuing public corporation, during the thirty trading days preceding the earlier of the commencement of the tender offer or the making of the announcement, except that if no quotation is available the average market price is the fair market value on the date of purchase of the shares in question of a share as determined in good faith by the board of directors of the issuing public corporation.