A. On the terms and conditions and for the consideration determined by the corporation‘s board of directors, a corporation may sell, lease, exchange or otherwise dispose of all or substantially all of its property, with or without the goodwill, other than in the usual and regular course of business, if the board of directors proposes and its shareholders approve the proposed transaction.

Terms Used In Arizona Laws 10-1202

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Articles of incorporation: means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger. See Arizona Laws 10-140
  • 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
  • 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.
  • Distribution: means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. See Arizona Laws 10-140
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Property: includes both real and personal property. See Arizona Laws 1-215
  • 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
  • Vote: includes authorization by written ballot and written consent. See Arizona Laws 10-3140

B. For a transaction to be authorized:

1. The board of directors shall recommend the proposed transaction to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the submission of the proposed transaction.

2. The shareholders entitled to vote shall approve the transaction.

C. The board of directors may condition its submission of the proposed transaction on any basis.

D. The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders’ meeting in accordance with section 10-705. The notice shall also state that the purpose or one of the purposes of the meeting is to consider the sale, lease, exchange or other disposition of all or substantially all of the property of the corporation and shall contain or be accompanied by a description of the transaction.

E. Unless the articles of incorporation or the board of directors, acting pursuant to subsection C of this section, requires a greater vote or a vote by voting groups, a majority of all of the votes entitled to be cast on the transaction shall approve the transaction to be authorized.

F. After any sale, lease, exchange or other disposition of property is authorized, the transaction may be abandoned, subject to any contractual rights, without further shareholder action.

G. A transaction that constitutes a distribution is governed by section 10-640 and not by this section.