South Carolina Code 35-2-219. Business combination with interested shareholder; requirements
(1) a business combination approved by the board of directors of the resident domestic corporation before the interested shareholder’s share acquisition date, or as to which the purchase of shares made by the interested shareholder on the interested shareholder’s share acquisition date had been approved by the board of directors of the resident domestic corporation before the interested shareholder’s share acquisition date;
Terms Used In South Carolina Code 35-2-219
- affiliate: means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a specified person. See South Carolina Code 35-2-201
- announcement date: when used in reference to any business combination, means the date of the first public announcement of the definitive proposal for the business combination, without regard to subsequent amendments. See South Carolina Code 35-2-202
- associate: when used to indicate a relationship with any person, means:
(1) any corporation or organization of which the person is an officer or partner or is (directly or indirectly) the beneficial owner of ten percent or more of any class of voting shares;
(2) any trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and
(3) any relative or spouse of the person, or any relative of the spouse, who has the same home as the person. See South Carolina Code 35-2-203 - beneficial owner: when used with respect to any shares, means a person that:
(1) individually or with or through any of its affiliates or associates beneficially owns the shares (directly or indirectly);
(2) individually or with or through any of its affiliates or associates has:
(A) the right to acquire the shares (whether the right is exercisable immediately or only after the passage of time) under any agreement, arrangement, or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise. See South Carolina Code 35-2-204 - business combination: when used in reference to any resident domestic corporation and any interested shareholder of the resident domestic corporation, means any of the following:
(1) Any merger of the resident domestic corporation or any subsidiary of the resident domestic corporation with:
(A) the interested shareholder; or
(B) any other corporation (whether or not itself an interested shareholder of the resident domestic corporation) that is, or after the merger or consolidation would be, an affiliate or associate of the interested shareholder. See South Carolina Code 35-2-205 - common stock: means any shares other than preferred shares. See South Carolina Code 35-2-206
- 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 resident domestic corporation, means any person (other than the resident domestic corporation or any subsidiary of the resident domestic corporation) that is:
(1) the beneficial owner (directly or indirectly) of ten percent or more of the voting power of the outstanding voting shares of the resident domestic corporation; or
(2) an affiliate or associate of the resident domestic corporation and at any time within the two-year period immediately before the date in question was the beneficial owner (directly or indirectly) of ten percent or more of the voting power of the then outstanding shares of the resident domestic corporation. See South Carolina Code 35-2-210 - market value: when used in reference to shares or property of any resident domestic corporation, means the following:
(1) In the case of shares, the highest closing sale price of a share during the thirty-day period immediately preceding the date in question 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 Exchange Act on which the shares are listed, or, if the shares are not listed on any such exchange, the highest closing bid quotation with respect to a share during the thirty-day period preceding the date in question on the National Association of Securities Dealers, Inc. See South Carolina Code 35-2-211 - resident domestic corporation: means a domestic corporation that has a class of voting shares registered with the Securities and Exchange Commission or another federal agency under Section 12 of the 1934 Exchange Act. See South Carolina Code 35-2-213
- share: means :
(1) any share or similar security, any certificate of interest, and participation in any profit sharing agreement, any voting trust certificate, or any certificate of deposit for a share; and
(2) any security convertible, with or without consideration, into shares, or any warrant, call, or other option or privilege of buying shares without being bound to do so, or any other security carrying any right to acquire, subscribe to, or purchase shares. See South Carolina Code 35-2-214 - voting shares: means shares of capital stock of a corporation entitled to vote generally in the election of directors. See South Carolina Code 35-2-217
(2) a business combination approved by the affirmative vote of the holders of a majority of the outstanding voting shares not beneficially owned by the interested shareholder proposing the business combination, or any affiliate or associate of the interested shareholder proposing the business combination, at a meeting called for that purpose no earlier than two years after the interested shareholder’s share 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 the resident domestic corporation in the business combination is at least equal to the higher of the following:
(i) the highest per share price paid by the interested shareholder, at a time when the interested shareholder was the beneficial owner (directly or indirectly) of five percent or more of the outstanding voting shares of the resident domestic corporation, for any shares of common stock of the same class or series acquired by it within the two-year period immediately before the announcement date with respect to the business combination or within the two-year period immediately before, or in, the transaction in which the interested shareholder became an interested shareholder, whichever is higher; plus, in either case, interest compounded annually from the earliest date on which the 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 the earliest date, up to the amount of the interest;
(ii) the market value per share of common stock on the announcement date with respect to the business combination or on the interested shareholder’s share acquisition date, whichever is higher; plus interest compounded annually from that 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 that date, up to the amount of the 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 shares, other than common stock, of the resident domestic corporation is at least equal to the highest of the following (whether or not the interested shareholder has previously acquired any shares of the class or series of shares):
(i) the highest per share price paid by the interested shareholder, at a time when the interested shareholder was the beneficial owner (directly or indirectly) of five percent or more of the outstanding voting shares of the resident domestic corporation, for any shares of the class or series of shares acquired by it within the two-year period immediately before the announcement date with respect to the business combination or within the two-year period immediately before, or in, the transaction in which the interested shareholder became an interested shareholder, whichever is higher; plus, in either case, interest compounded annually from the earliest date on which the 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 the class or series of shares since the earliest date, up to the amount of the interest;
(ii) the highest preferential amount per share to which the holders of shares of the class or series of shares are entitled in the event of any voluntary liquidation, dissolution, or winding up of the resident domestic corporation, plus the aggregate amount of any dividends declared or due as to which the holders are entitled before payment of dividends, on some other class or series of shares (unless the aggregate amount of the dividends is included in the preferential amount);
(iii) the market value per share of the class or series of shares on the announcement date with respect to the business combination or on the interested shareholder’s share acquisition date, whichever is higher; plus interest compounded annually from that date through the consummation date at the rate of 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 the class or series of shares since that date, up to the amount of the interest.
(C) The consideration to be received by holders of a particular class or series of outstanding shares, including common stock, of the resident domestic corporation in the business combination is in cash or in the same form as the interested shareholder has used to acquire the largest number of shares of the class or series of shares previously acquired by it, and the consideration must be distributed promptly.
(D) The holders of all outstanding shares of the resident domestic corporation not beneficially owned by the interested shareholder immediately before the consummation of the business combination are entitled to receive in the business combination cash or other consideration for the shares in compliance with subitems (A), (B), and (C).
(E) After the interested shareholder’s share acquisition date and before the consummation date with respect to the business combination, the interested shareholder has not become the beneficial owner of any additional voting shares of the resident domestic corporation except:
(i) as part of the transaction that resulted in the interested shareholder becoming an interested shareholder;
(ii) by virtue of proportionate share splits, share dividends, or other distributions of shares in respect of shares not constituting a business combination under § 35-2-205(5);
(iii) through a business combination meeting all of the conditions of § 35-2-218 and this section; or
(iv) through purchase by the interested shareholder at any price that, if the price had been paid in an otherwise permissible business combination the announcement date and consummation date of which were the date of the purchase, would have satisfied the requirement of subitems (A), (B), and (C).