(a) It is unlawful for any corporation subject to this part, including any subsidiary of such corporation, to purchase, directly or indirectly, any of its shares at a price above the market value of such shares from any person who holds more than three percent (3%) of the class of the securities to be purchased if such person has held such shares for less than two (2) years, unless such purchase has been approved by the affirmative vote of a majority of the outstanding shares of each class of voting stock issued by such corporation or the corporation makes an offer, of at least equal value per share, to all holders of shares of such class.

Terms Used In Tennessee Code 48-103-503

  • 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
  • Control: means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person whether through the ownership of voting securities, by contract or otherwise. See Tennessee Code 48-103-502
  • 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.
  • Person: means any individual, corporation, partnership, unincorporated association or other entity and any "associate" (as defined in subdivision (1)) of such individual or entity. See Tennessee Code 48-103-502
  • Share: means the unit into which the proprietary interests in a corporation are divided. See Tennessee Code 48-11-201
  • Subsidiary: means any corporation in which a majority of the shares entitled to vote are owned or controlled, directly or indirectly, by a corporation subject to this part. See Tennessee Code 48-103-502
(b) For the purposes of this section, the market value of such shares shall be the average of the highest and lowest closing market price for such shares during the thirty (30) trading days preceding the purchase and sale of the shares subject to this section; provided, that if the seller of such shares has commenced a tender offer or has announced an intention to seek control of the corporation, such market price shall be based upon the average of the highest and lowest closing price for such shares during the thirty (30) trading days preceding the commencement of such tender offer or the making of such announcement.
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