If a business combination is subject to regulation under this part and the requisite approval for the business combination or acquisition of shares has not been obtained from the resident domestic corporation board of directors under § 48-103-205 prior to such interested shareholder‘s share acquisition date, a resident domestic corporation shall only engage in a business combination, or vote, consent or otherwise act to authorize a subsidiary of the resident domestic corporation to engage in any business combination, with, 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 resident domestic corporation or any affiliate or associate of such interested shareholder after the expiration of a period of five (5) years commencing as of such interested shareholder’s share acquisition date, if such business combination satisfies all applicable requirements contained in the resident domestic corporation’s charter or bylaws, the applicable provisions of the Tennessee Business Corporation Act, compiled in chapters 11-27 of this title, or other Tennessee statutes and is additionally either:

(1) A business combination which has been approved by the affirmative vote of the holders of two thirds (2/3) of the voting stock not beneficially owned by such interested shareholder and the affiliates and associates of such interested shareholder at a meeting called for such purpose no earlier than five (5) years after such interested shareholder’s share acquisition date; or

Terms Used In Tennessee Code 48-103-206

  • Affiliate: when used to indicate a relationship with an interested shareholder, means a person that directly or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, or is acting in concert with, a specified person. See Tennessee Code 48-103-203
  • Announcement date: when used in reference to any business combination, means the date of the first public announcement of a final definitive proposal for such business combination. See Tennessee Code 48-103-203
  • Associate: when used to indicate a relationship with an interested shareholder, means:
    (A) Any domestic or foreign corporation, partnership, syndicate, joint venture or other unincorporated organization of which such person is an officer, director, manager or partner (either general or limited) or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of voting stock. See Tennessee Code 48-103-203
  • Beneficial owner: when used with respect to any class or series of shares or other securities, means a person that:
    (A) Individually, or with or through any of its affiliates or associates, beneficially owns such shares or other securities, directly or indirectly. See Tennessee Code 48-103-203
  • board of directors: means the governing board of a corporation, whether denominated the board of directors or otherwise, except that no person or group of persons is the board of directors because of powers delegated to that person or group pursuant to §. See Tennessee Code 48-51-201
  • Business: includes every trade, occupation, profession, investment activity and other lawful purpose for gain or the preservation of assets whether or not carried on for profits. See Tennessee Code 48-202-101
  • Business combination: when used in reference to any resident domestic corporation and any interested shareholder of such resident domestic corporation or any affiliate or associate of such interested shareholder, means:
    (A) Any merger or consolidation of such resident domestic corporation or any subsidiary of such resident domestic corporation with:
    (i) An interested shareholder or any affiliate or associate of such interested shareholder. See Tennessee Code 48-103-203
  • Bylaws: means the code or codes of rules (other than the charter) adopted pursuant to chapters 51-68 of this title for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated. See Tennessee Code 48-51-201
  • Charter: includes amended and restated charters and articles of merger. See Tennessee Code 48-11-201
  • Class: when used with reference to membership interests, means a category of membership interests that differs in one (1) or more rights or preferences from another category of membership interests of the LLC. See Tennessee Code 48-202-101
  • 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.
  • Dissolution: means that the LLC has incurred an event under §. See Tennessee Code 48-202-101
  • domestic corporation: means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the Tennessee Business Corporation Act, compiled in chapters 11-27 of this title, as amended. See Tennessee Code 48-202-101
  • Interest: means either or both of the following rights under the organic law of an unincorporated entity:
    (A) The right to receive distributions from the entity either in the ordinary course or upon liquidation. See Tennessee Code 48-11-201
  • Interested shareholder: when used in reference to any resident domestic corporation, means any person (other than such resident domestic corporation or any subsidiary of such resident domestic corporation) that:
    (A)
    (i) Is the beneficial owner, directly or indirectly, of ten percent (10%) or more of the voting power of any class or series of the then outstanding voting stock of such resident domestic corporation. See Tennessee Code 48-103-203
  • Market value: when used in reference to property of any resident domestic corporation, means:
    (A) In the case of shares, the highest closing sale price during the thirty-day period immediately preceding the date in question of a share of such shares on the composite tape for New York Stock Exchange-listed stocks, or, if such shares are not quoted on such composite tape or if such shares are not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which such shares are listed or, if such shares are not listed on any such exchange, the highest closing sale price (or bid quotation if no such sale price exists) with respect to such shares during the thirty-day period preceding the date in question on the National Association of Securities Dealers, Inc. See Tennessee Code 48-103-203
  • Resident domestic corporation: means an issuer of voting stock which, as of the share acquisition date in question, is organized under the laws of Tennessee and meets two (2) or more of the following requirements:
    (A)
    (i) The corporation has more than either ten thousand (10,000) or ten percent (10%) of its shareholders resident in Tennessee or more than ten percent (10%) of its outstanding shares held by resident Tennessee shareholders. See Tennessee Code 48-103-203
  • Series: means a category of membership interests, within a class of membership interests, that have some of the same rights and preferences as other membership interests within the same class, but that differ in one (1) or more rights and preferences from another category of membership interests within that class. See Tennessee Code 48-202-101
  • Share: means the unit into which the proprietary interests in a corporation are divided. See Tennessee Code 48-11-201
  • 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 Tennessee Code 48-11-201
  • shares: means :
    (A) Any stock or other equity interest in any class or series of stock designated in the charter of the resident domestic corporation or its subsidiaries, any certificate of interest, any participation in any profit sharing agreement, any voting trust certificate, or any certificate of deposit for stock in any class or series. See Tennessee Code 48-103-203
  • Subsidiary: means a corporation more than fifty percent (50%) of whose outstanding voting shares are owned by its parent and/or the parent's other wholly-owned subsidiaries. See Tennessee Code 48-11-201
  • United States: includes district, authority, bureau, commission, department, and any other agency of the United States. See Tennessee Code 48-11-201
  • Voting stock: means all shares of the resident domestic corporation entitled to vote generally in the election of directors. See Tennessee Code 48-103-203
(2) A business combination, with respect to which the consummation date is no earlier than five (5) years after the interested shareholder’s share acquisition date; provided, that such business combination 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 each outstanding class or series of shares of such resident domestic corporation in such business combination is at least equal to the higher of the following:

(i) The highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by such interested shareholder for any shares of the same class or series acquired by it:

(a) Within the five-year period immediately prior to the announcement date with respect to such business combination; or
(b) Within the five-year period immediately prior to the transaction in which such interested shareholder became an interested shareholder; whichever is higher; plus, in either case, interest compounded annually from the earliest date on which such 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 since such earliest date, up to the amount of such interest;
(ii) The highest preferential amount per share to which the holders of shares of such class or series of shares are entitled in the event of any liquidation, dissolution or winding up of such resident domestic corporation, plus the aggregate amount of any dividends declared or due as to which such holders are entitled prior to payment of dividends on some other class or series of shares (unless the aggregate amount of such dividends is included in such preferential amount); or
(iii) The market value per share of each class or series of shares on the announcement date with respect to such business combination or on such interested shareholder’s share acquisition date, whichever is higher; plus interest compounded annually from such 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 on each class or series of shares since such date, up to the amount of such interest;
(B) The consideration to be received by holders of a particular class or series of outstanding shares of such resident domestic corporation in such business combination is in cash or in the same form as the interested shareholder used to acquire the largest number of shares of such class or series of shares previously acquired by the interested shareholder and such consideration shall be distributed as soon as practical;
(C) The holders of all outstanding shares of each class or series of shares of such resident domestic corporation not beneficially owned by such interested shareholder immediately prior to the consummation of such business combination (except those who may perfect their rights of dissent) are entitled to receive in such business combination cash or other consideration for such shares in compliance with subdivisions (2)(A) and (B); and
(D) After such interested shareholder’s share acquisition date and prior to the consummation date with respect to such business combination, such interested shareholder has not become the beneficial owner of any additional shares of such resident domestic corporation except:

(i) As part of the transaction which resulted in such 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 § 48-103-203(5)(F); or
(iii) Through purchase by such interested shareholder at any price which, if such price had been paid in an otherwise permissible business combination, would have satisfied the requirements of subdivisions (2)(A)-(C).
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