Arizona Laws 10-2741. Business combination with interested shareholder; approval by committee of the directors
A. Except for the provisions of section 10-2743, an issuing public corporation may not engage in any business combination or vote, consent or otherwise act to authorize a subsidiary of the issuing public corporation to engage in any business combination with respect to, proposed by or on behalf of or pursuant to any agreement, arrangement or understanding, whether or not in writing, with any interested shareholder of the issuing public corporation or any affiliate or associate of the interested shareholder for a period of three years after the interested shareholder’s share acquisition date, unless either:
Terms Used In Arizona Laws 10-2741
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Affiliate: means a person that directly or indirectly controls, is controlled by or is under common control with a specified person. See Arizona Laws 10-2701
- Associate: when used to indicate a relationship with any person, means any of the following:
(a) Any corporation or entity of which the person is an officer, director or partner or is, directly or indirectly, the beneficial owner of ten per cent or more of any class or series of shares or other equity interest. 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
- Business combination: when used in reference to any issuing public corporation and any interested shareholder of the issuing public corporation, means any of the following:
(a) Any merger or consolidation of the issuing public corporation or any subsidiary of the issuing public corporation with either:
(i) The interested shareholder. See Arizona Laws 10-2701
- 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.
- Interested shareholder: when used in reference to any issuing public corporation, means any person, other than the issuing public corporation or any subsidiary of the issuing public corporation, that is either:
(a) The beneficial owner, directly or indirectly, of ten per cent or more of the voting power of the outstanding shares of the issuing public corporation. See Arizona Laws 10-2701
- 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
- Shareholder: means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation. See Arizona Laws 10-140
- Shares: means those shares presently entitled to vote in the election of directors of the issuing public corporation. See Arizona Laws 10-2701
- Vote: includes authorization by written ballot and written consent. See Arizona Laws 10-3140
- Writing: includes printing. See Arizona Laws 1-215
1. The business combination with the interested shareholder is approved by a committee, formed in accordance with subsection D of this section, of the board of directors of the issuing public corporation before the interested shareholder’s share acquisition date pursuant to subsection B of this section.
2. The acquisition of shares made by the interested shareholder on the shareholder’s share acquisition date is approved by a committee, formed in accordance with subsection D of this section, of the board of directors of the issuing public corporation before the interested shareholder’s share acquisition date pursuant to subsection C of this section.
B. Any approval of a business combination pursuant to subsection A, paragraph 1 of this section must be given by the committee in writing within forty-five days after receipt by the committee of a good faith definitive proposal in writing regarding the business combination, and in the absence of such approval, the proposed business combination shall be deemed to have been disapproved.
C. Any approval of a share acquisition pursuant to subsection A, paragraph 2 of this section must be given by the committee in writing within forty-five days after receipt by the committee of a good faith definitive proposal in writing regarding the share acquisition, and in the absence of such approval, the proposed share acquisition shall be deemed to have been disapproved.
D. When a business combination or acquisition of shares is proposed pursuant to this section, the board of directors shall promptly form a committee composed of all disinterested directors. The committee shall take action on the proposal by the affirmative vote of a simple majority of committee members. The committee is not subject to any direction or control by the board of directors with respect to the committee’s consideration of or any action concerning a proposed business combination or acquisition of shares pursuant to this section. A committee formed pursuant to this subsection shall be composed of one or more members. Only disinterested directors may be members of a committee formed pursuant to this subsection. However, if there are no disinterested directors, the board of directors shall select three or more disinterested persons to be committee members. For purposes of this subsection, a director or person is disinterested if the director or person is not an interested shareholder, an affiliate or associate of an interested shareholder or a present or former officer or employee of the issuing public corporation or of an affiliate or associate of the issuing public corporation or of the interested shareholder or of any affiliate or associate of the interested shareholder.