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- 1--Bod adopts & S (if 1103 reqs) approves Merger Plan:
- _Shall Set forth:
- * name of merging corps + surviving corp.
- *terms/conditions of merger;
- *manner of converting shares. (old to new).
- __May Set forth:
- * Articles (restatements/amendments)
- * Merging date;
- *anything else...
1102 Share Exchange
- A corp can acquire all outstanding shares of a corp if :
- (1) BODs of all corps adopts & S (if 1103 reqs) approves plan of exchange.
- (2) Plan of Exchange shall set forth:
- * name of corps.
- *any other provisions...
(4) corp is not limited from acquiring all or some shares of another corp, through exchange or otherwise.
1103 Action Plan (1)(7)
- Plan of Merger/ Share exchange must be adopted by both BOD & Submitted to all S for approval.
- Unless, Action isn't required from S of surviving corp b/c:
- a) Articles don't change;
- b) Surviving SH's shares aren't affected by merger.
1103--Plan of Merger/Share Exchange
(2) BOD must recommend unless conflict of interest
(2) BOD must recommend unless conflict of interest....
If conflict of interest, then must disclose the conflict to the S & submit it with the plan for approval.
Williams Act (Tender Offer)
- Anyone who acquires 5% of a company's stock must make a filing w/the SEC disclosing:
- 1) their intent;
- 2) their business background;
- 3) where they got the money....
- A tender offer:
- 1) requires the same disclosures as a proxy material disclosure would.
- 2) must be held open for 20 days.
BOD resisting a takeover
- IF the board can demonstrate a legitimate business reason for resisting a takeover, then
- action taken to resist the takeover is appropriate.
- *to preserve the workforce (from a known looter/or mismanager/breaking companies up)
*Defensive action must be Proportionate to the Threat.
- where the takeover becomes inevitable...
- the bod must seize to resist & must act to maximize the sale/benefit to the shareholders.
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