Minnesota Session Laws - 1987, 1st Special Session

 

                         Laws of Minnesota 1987 

                          CHAPTER 1-H.F.No. 1 
           An act relating to shareholder protection and 
          corporate take-overs; regulating the registration of 
          take-over offers and limitations on offerors; 
          expressly authorizing directors to consider the 
          interests of a corporation's various constituencies; 
          regulating acquisitions of shares; regulating the 
          calling of special meetings of shareholders, control 
          share acquisitions, and business combinations with 
          interested shareholders; amending Minnesota Statutes 
          1986, sections 80B.01, subdivisions 6 and 9; 302A.011, 
          subdivisions 37 to 39, 40, as amended, 41, and by 
          adding subdivisions; 302A.251, by adding a 
          subdivision; 302A.255, by adding a subdivision; 
          302A.433, subdivisions 1 and 2; 302A.553, subdivision 
          1, as amended, and by adding a subdivision; and 
          302A.671; proposing coding for new law in Minnesota 
          Statutes, chapter 302A; repealing Laws 1985, First 
          Special Session chapter 5, as amended. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 80B.01, 
subdivision 6, is amended to read: 
    Subd. 6.  "Offeror" means a person who makes or in any way 
participates in making a take-over offer.  Offeror does not 
include any bank or broker-dealer loaning funds to an offeror in 
the ordinary course of its business, or any bank, broker-dealer, 
attorney, accountant, consultant, employee, or other person 
furnishing information or advice to or performing ministerial 
duties for an offeror, and not otherwise participating in the 
take-over offer.  When two or more persons act as a partnership, 
limited partnership, syndicate, or other group pursuant to any 
agreement, arrangement, relationship, understanding, or 
otherwise (whether or not in writing) for the purpose of 
acquiring, owning, or voting securities of a target company, all 
members of the partnership, syndicate or other group is an 
"offeror constitute "a person." 
     Sec. 2.  Minnesota Statutes 1986, section 80B.01, 
subdivision 9, is amended to read: 
    Subd. 9.  "Target company" means an issuer of publicly 
traded equity securities (a) which has at least 20 percent of 
its equity securities beneficially owned by residents of this 
state and (1) has its principal place of business or its 
principal executive office located in this state, or (2) owns or 
controls assets located within this state which have a fair 
market value of at least $1,000,000, and (b) which (1) has more 
than ten percent of its beneficial or record equity 
securityholders resident in this state, (2) has more than ten 
percent of its equity securities owned beneficially or of record 
by residents in this state, or (3) has more than 1,000 
beneficial or record equity securityholders resident in this 
state.  For the purposes of this chapter, an equity security is 
publicly traded if a trading market exists for the security at 
the time the offeror makes a take-over offer for the security.  
A trading market exists if the security is traded on a national 
securities exchange, whether or not registered pursuant to the 
Securities Exchange Act of 1934, or the over-the-counter market. 
    Sec. 3.  Minnesota statutes 1986, section 302A.011, 
subdivision 37, is amended to read: 
    Subd. 37.  [ACQUIRING PERSON.] "Acquiring person" means a 
person that is proposing makes or proposes to make a control 
share acquisition.  When two or more persons act as a 
partnership, limited partnership, syndicate, or other 
group pursuant to any agreement, arrangement, relationship, 
understanding, or otherwise (whether or not in writing) for the 
purposes of acquiring, owning, or voting securities shares of an 
issuing public corporation, all members of the partnership, 
syndicate, or other group is constitute a "person." 
    "Acquiring person" does not include a licensed 
broker/dealer or licensed underwriter who (1) purchases shares 
of an issuing public corporation solely for purposes of resale 
to the public; and (2) is not acting in concert with an 
acquiring person. 
    Sec. 4.  Minnesota Statutes 1986, section 302A.011, 
subdivision 38, is amended to read:  
    Subd. 38.  [CONTROL SHARE ACQUISITION.] "Control share 
acquisition" means an acquisition, directly or indirectly, by an 
acquiring person of beneficial ownership of shares of an issuing 
public corporation resulting in beneficial ownership by an 
acquiring person that, except for section 302A.671, would, when 
added to all other shares of the issuing public corporation 
beneficially owned by the acquiring person, entitle the 
acquiring person, immediately after the acquisition, to exercise 
or direct the exercise of a new range of voting power within any 
of the ranges specified in section 302A.671, subdivision 2, 
paragraph (d), but does not include any of the following:  
    (1) (a) an acquisition before, or pursuant to an agreement 
entered into before, August 1, 1984;  
    (2) (b) an acquisition by a donee pursuant to an inter 
vivos gift not made to avoid section 302A.671 or by a 
distributee as defined in section 524.1-201, clause (10);  
    (3) (c) an acquisition pursuant to a security agreement not 
created to avoid section 302A.671;  
    (4) (d) an acquisition under sections 302A.601 to 302A.661, 
if the issuing public corporation is a party to the transaction; 
or 
    (5) (e) an acquisition from the issuing public corporation; 
or 
    (f) an acquisition for the benefit of others by a person 
acting in good faith and not made to avoid section 302A.671, to 
the extent that the person may not exercise or direct the 
exercise of the voting power or disposition of the shares except 
upon the instruction of others. 
    All shares the beneficial ownership of which is acquired 
within a 120-day period, and all shares the beneficial ownership 
of which is acquired pursuant to a plan to make a control share 
acquisition, shall be deemed to have been acquired in the same 
acquisition.  
    Sec. 5.  Minnesota Statutes 1986, section 302A.011, 
subdivision 39, is amended to read:  
    Subd. 39.  [ISSUING PUBLIC CORPORATION.] "Issuing public 
corporation" means a corporation with (a) which has at least 50 
shareholders and, (b) which (1) has either its principal place 
of business or its principal executive office located in this 
state or (2) owns or controls assets located within this state 
that have a fair market value of at least $1,000,000, and (c) 
which (1) has more than ten percent of its beneficial or record 
shareholders resident in this state, (2) has more than ten 
percent of its shares owned beneficially or of record by 
residents in this state, or (3) has more than 1,000 beneficial 
or record shareholders resident in this state. 
    Sec. 6.  Minnesota Statutes 1986, section 302A.011, 
subdivision 40, as amended by Laws 1987, chapter 104, section 6, 
is amended to read:  
    Subd. 40.  [PUBLICLY HELD CORPORATION.] "Publicly held 
corporation" means a corporation that has a class of equity 
securities registered pursuant to section 12, or is subject to 
section 15(d), of the Securities Exchange Act of 1934, as 
amended through December 31, 1986. 
    Sec. 7.  Minnesota Statutes 1986, section 302A.011, 
subdivision 41, is amended to read:  
    Subd. 41.  [BENEFICIAL OWNERSHIP.] "Beneficial owner", when 
used with respect to shares or other securities, includes, but 
is not limited to, any person who, directly or indirectly 
through any contract agreement, arrangement, relationship, 
understanding, relationship, or otherwise (whether or not in 
writing), has or shares the power to vote, or direct the voting 
of a security and, the shares or securities and/or has or shares 
the power to dispose of, or direct the disposition of, 
the security shares or securities, provided that a person shall 
not be deemed the beneficial owner of shares or securities 
tendered pursuant to a tender or exchange offer made by the 
person or any of the person's affiliates or associates until the 
tendered shares or securities are accepted for purchase or 
exchange, and provided that a person shall not be deemed the 
beneficial owner of shares or securities with respect to which 
the person has the power to vote or direct the voting arising 
solely from a revocable proxy given in response to a proxy 
solicitation required to be made and made in accordance with the 
applicable rules and regulations under the Securities Exchange 
Act of 1934 and is not then reportable under that act on a 
Schedule 13D or comparable report.  "Beneficial ownership" 
includes, but is not limited to, the right, exercisable within 
60 days, to acquire shares or securities through the exercise of 
options, warrants, or rights, or the conversion of convertible 
securities, or otherwise.  The shares or securities subject to 
these the options, warrants, rights, or conversion privileges 
held by a person shall be deemed to be outstanding for the 
purpose of computing the percentage of outstanding shares or 
securities of the class or series owned by this the person, but 
shall not be deemed to be outstanding for the purpose of 
computing the percentage of the class or series owned by any 
other person.  A person is shall be deemed the beneficial owner 
of shares and securities beneficially owned by any relative or 
spouse of the person or any relative of the spouse residing in 
the home of this the person, any trust or estate in which this 
the person owns ten percent or more of the total beneficial 
interest or serves as trustee or executor or in a similar 
fiduciary capacity, any corporation or entity in which this the 
person owns ten percent or more of the equity, and any affiliate 
or associate of this the person. 
    Sec. 8.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 42.  [INTERESTED SHARES.] "Interested shares" means 
the shares of an issuing public corporation with respect to 
which any of the following persons may exercise or direct the 
exercise of voting power in the election of directors of the 
issuing public corporation:  (1) an acquiring person, (2) any 
officer of the issuing public corporation, or (3) any employee 
of the issuing public corporation who is also a director of the 
issuing public corporation. 
    Sec. 9.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 43.  [AFFILIATE.] "Affiliate" means a person that 
directly or indirectly controls, is controlled by, or is under 
common control with, a specified person. 
    Sec. 10.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 44.  [ANNOUNCEMENT DATE.] "Announcement date," when 
used in reference to any business combination, means the date of 
the first public announcement of the final, definitive proposal 
for the business combination.  
    Sec. 11.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read:  
    Subd. 45.  [ASSOCIATE.] "Associate," when used to indicate 
a relationship with any person, means any of the following:  
    (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 or series 
of shares entitled to vote or other equity interest;  
    (2) any trust or estate in which the person has a 
substantial beneficial interest or as to which the person serves 
as trustee or executor or in a similar fiduciary capacity;  
    (3) any relative or spouse of the person, or any relative 
of the spouse, residing in the home of the person.  
    Sec. 12.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 46.  [BUSINESS COMBINATION.] "Business combination," 
when used in reference to any issuing public corporation and any 
interested shareholder of the issuing public corporation, means 
any of the following:  
     (a) any merger of the issuing public corporation or any 
subsidiary of the issuing public corporation with (1) the 
interested shareholder or (2) any other domestic or foreign 
corporation (whether or not itself an interested shareholder of 
the issuing public corporation) that is, or after the merger 
would be, an affiliate or associate of the interested 
shareholder, provided, however, that the foregoing shall not 
include the merger of a wholly-owned subsidiary of the issuing 
public corporation into the issuing public corporation or the 
merger of two or more wholly-owned subsidiaries of the issuing 
public corporation;  
     (b) any exchange, pursuant to a plan of exchange under 
section 302A.601, subdivision 2, or a comparable statute of any 
other state or jurisdiction, of shares of the issuing public 
corporation or any subsidiary of the issuing corporation for 
shares of (1) the interested shareholder or (2) any other 
domestic or foreign corporation (whether or not itself an 
interested shareholder of the issuing public corporation) that 
is, or after the exchange would be, an affiliate or associate of 
the interested shareholder; 
    (c) any sale, lease, exchange, mortgage, pledge, transfer, 
or other disposition (in a single transaction or a series of 
transactions), to or with the interested shareholder or any 
affiliate or associate of the interested shareholder, of assets 
of the issuing public corporation or any subsidiary of the 
issuing public corporation (1) having an aggregate market value 
equal to ten percent or more of the aggregate market value of 
all the assets, determined on a consolidated basis, of the 
issuing public corporation, (2) having an aggregate market value 
equal to ten percent or more of the aggregate market value of 
all the outstanding shares of the issuing public corporation, or 
(3) representing ten percent or more of the earning power or net 
income, determined on a consolidated basis, of the issuing 
public corporation;  
     (d) the issuance or transfer by the issuing public 
corporation or any subsidiary of the issuing public corporation 
(in a single transaction or a series of transactions) of any 
shares of the issuing public corporation or any subsidiary of 
the issuing public corporation that have an aggregate market 
value equal to five percent or more of the aggregate market 
value of all the outstanding shares of the issuing public 
corporation to the interested shareholder or any affiliate or 
associate of the interested shareholder, except pursuant to the 
exercise of warrants or rights to purchase shares offered, or a 
dividend or distribution paid or made, pro rata to all 
shareholders of the issuing public corporation; 
    (e) the adoption of any plan or proposal for the 
liquidation or dissolution of the issuing public corporation, or 
any reincorporation of the issuing public corporation in another 
state or jurisdiction, proposed by or on behalf of, or pursuant 
to any agreement, arrangement, or understanding (whether or not 
in writing) with, the interested shareholder or any affiliate or 
associate of the interested shareholder;  
    (f) any reclassification of securities (including without 
limitation any share dividend or split, reverse share split, or 
other distribution of shares in respect of shares), 
recapitalization of the issuing public corporation, merger of 
the issuing public corporation with any subsidiary of the 
issuing public corporation, exchange of shares of the issuing 
public corporation with any subsidiary of the issuing public 
corporation, or other transaction (whether or not with or into 
or otherwise involving the interested shareholder), proposed by 
or on behalf of, or pursuant to any agreement, arrangement, or 
understanding (whether or not in writing) with, the interested 
shareholder or any affiliate or associate of the interested 
shareholder, that has the effect, directly or indirectly, of 
increasing the proportionate share of the outstanding shares of 
any class or series of shares entitled to vote, or securities 
that are exchangeable for, convertible into, or carry a right to 
acquire shares entitled to vote, of the issuing public 
corporation or any subsidiary of the issuing public corporation 
that is, directly or indirectly, owned by the interested 
shareholder or any affiliate or associate of the interested 
shareholder, except as a result of immaterial changes due to 
fractional share adjustments;  
    (g) any receipt by the interested shareholder or any 
affiliate or associate of the interested shareholder of the 
benefit, directly or indirectly (except proportionately as a 
shareholder of the issuing public corporation), of any loans, 
advances, guarantees, pledges, or other financial assistance, or 
any tax credits or other tax advantages provided by or through 
the issuing public corporation or any subsidiary of the issuing 
public corporation.  
    Sec. 13.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read:  
    Subd. 47.  [CONSUMMATION DATE.] "Consummation date," with 
respect to any business combination, means the date of 
consummation of the business combination or, in the case of a 
business combination as to which a shareholder vote is taken, 
the later of (1) the business day before the vote or (2) 20 days 
before the date of consummation of the business combination.  
    Sec. 14.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read:  
    Subd. 48.  [CONTROL.] "Control," including the terms 
"controlling," "controlled by," and "under common control with," 
means the possession, directly or indirectly, of the power to 
direct or cause the direction of the management and policies of 
a person, whether through the ownership of voting securities, by 
contract, or otherwise.  A person's beneficial ownership of ten 
percent or more of the voting power of a corporation's 
outstanding shares entitled to vote in the election of directors 
creates a presumption that the person has control of the 
corporation.  Notwithstanding the foregoing, a person is not 
considered to have control of a corporation if the person holds 
voting power, in good faith and not for the purpose of avoiding 
section 302A.673, as an agent, bank, broker, nominee, custodian, 
or trustee for one or more beneficial owners who do not 
individually or as a group have control of the corporation.  
    Sec. 15.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 49. [INTERESTED SHAREHOLDER.] "Interested 
shareholder," when used in reference to any issuing public 
corporation, means any person (other than the issuing public 
corporation or any subsidiary of the issuing public corporation) 
that is (1) the beneficial owner, directly or indirectly, of ten 
percent or more of the voting power of the outstanding shares 
entitled to vote of the issuing public corporation or (2) an 
affiliate or associate of the issuing public corporation and at 
any time within the five-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 entitled to vote of the issuing public corporation.  
    Sec. 16.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read:  
    Subd. 50.  [MARKET VALUE.] "Market value," when used in 
reference to shares or property of any issuing public 
corporation, means the following:  
    (1) in the case of shares, the highest closing sale price 
during the 30-day period immediately preceding the date in 
question of a share 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 Securities Exchange Act of 1934 on which the shares are 
listed, or, if the shares are not listed on any such exchange, 
on the National Association of Securities Dealers, Inc. 
Automated Quotations National Market System, or, if the shares 
are not quoted on the National Association of Securities 
Dealers, Inc. Automated Quotations National Market System, the 
highest closing bid quotation during the 30-day period preceding 
the date in question of a share on the National Association of 
Securities Dealers, Inc. Automated Quotations System or any 
system then in use, or, if no such quotation is available, the 
fair market value on the date in question of a share as 
determined in good faith by the board of the issuing public 
corporation, subject to arbitration;  
    (2) in the case of property other than cash or shares, the 
fair market value of the property on the date in question as 
determined in good faith by the board of the issuing public 
corporation, subject to arbitration. 
    Sec. 17.  Minnesota Statutes 1986, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd 51.  [SHARE ACQUISITION DATE.] "Share acquisition 
date," with respect to any person and any issuing public 
corporation, means the date that the person first becomes an 
interested shareholder of the issuing public corporation. 
    Sec. 18.  Minnesota Statutes 1986, section 302A.251, is 
amended by adding a subdivision to read: 
    Subd. 5.  [CONSIDERATIONS.] In discharging the duties of 
the position of director, a director may, in considering the 
best interests of the corporation, consider the interests of the 
corporation's employees, customers, suppliers, and creditors, 
the economy of the state and nation, community and societal 
considerations, and the long-term as well as short-term 
interests of the corporation and its shareholders including the 
possibility that these interests may be best served by the 
continued independence of the corporation. 
    Sec. 19.  Minnesota Statutes 1986, section 302A.255, is 
amended by adding a subdivision to read: 
     Subd. 3.  [COMPENSATION AGREEMENTS.] During any tender 
offer or request or invitation for tenders of any class or 
series of shares of a publicly held corporation, other than an 
offer, request, or invitation by the publicly held corporation, 
the publicly held corporation shall not enter into or amend, 
directly or indirectly, agreements containing provisions, 
whether or not dependent on the occurrence of any event or 
contingency, that increase, directly or indirectly, the current 
or future compensation of any officer or director of the 
publicly held corporation.  This subdivision does not prohibit 
routine increases in compensation, or other routine compensation 
agreements, undertaken in the ordinary course of the publicly 
held corporation's business. 
    Sec. 20.  Minnesota Statutes 1986, section 302A.433, 
subdivision 1, is amended to read:  
    Subdivision 1.  [WHO MAY CALL.] Special meetings of the 
shareholders may be called for any purpose or purposes at any 
time, by: 
    (a) The chief executive officer; 
    (b) The chief financial officer; 
    (c) Two or more directors; 
    (d) A person authorized in the articles or bylaws to call 
special meetings; or 
    (e) A shareholder or shareholders holding ten percent or 
more of the voting power of all shares entitled to vote, except 
that a special meeting for the purpose of considering any action 
to directly or indirectly facilitate or effect a business 
combination, including any action to change or otherwise affect 
the composition of the board of directors for that purpose, must 
be called by 25 percent or more of the voting power of all 
shares entitled to vote. 
    Sec. 21.  Minnesota Statutes 1986, section 302A.433, 
subdivision 2, is amended to read:  
    Subd. 2.  [DEMAND BY SHAREHOLDERS.] A shareholder or 
shareholders holding ten percent or more of the voting power of 
all shares entitled to vote specified in subdivision 1, 
paragraph (e), may demand a special meeting of shareholders by 
written notice of demand given to the chief executive officer or 
chief financial officer of the corporation and containing the 
purposes of the meeting.  Within 30 days after receipt of the 
demand by one of those officers, the board shall cause a special 
meeting of shareholders to be called and held on notice no later 
than 90 days after receipt of the demand, all at the expense of 
the corporation.  If the board fails to cause a special meeting 
to be called and held as required by this subdivision, the 
shareholder or shareholders making the demand may call the 
meeting by giving notice as required by section 302A.435, all at 
the expense of the corporation. 
    Sec. 22.  Minnesota Statutes 1986, section 302A.553, 
subdivision 1, as amended by Laws 1987, chapter 104, section 39, 
is amended to read:  
    Subdivision 1.  [WHEN PERMITTED; STATUS OF SHARES.] A 
corporation may acquire its own shares, subject to section 
302A.551 and subdivision 3.  If the corporation pledges the 
shares to secure payment of the redemption price thereof, then 
the corporation shall not be deemed to have acquired the shares 
for the purposes of this subdivision until the pledge is 
released.  Shares acquired by a corporation constitute 
authorized but unissued shares of the corporation, unless the 
articles provide that they shall not be reissued, in which case 
the number of authorized shares is reduced by the number of 
shares acquired. 
    Sec. 23.  Minnesota Statutes 1986, section 302A.553, is 
amended by adding a subdivision to read: 
    Subd. 3.  [LIMITATION ON SHARE PURCHASES.] Except for 
redemptions under section 302A.671, subdivision 6, a publicly 
held corporation shall not, directly or indirectly, purchase or 
agree to purchase any shares entitled to vote from a person (or 
two or more persons who act as a partnership, limited 
partnership, syndicate, or other group pursuant to any 
agreement, arrangement, relationship, understanding, or 
otherwise, whether or not in writing, for the purpose of 
acquiring, owning, or voting shares of the publicly held 
corporation) who beneficially owns more than five percent of the 
voting power of the publicly held corporation for more than the 
average market price thereof if the shares have been 
beneficially owned by the person or persons for less than six 
months, unless the purchase or agreement to purchase is approved 
at a meeting of shareholders by the affirmative vote of the 
holders of a majority of the voting power of all shares entitled 
to vote or the publicly held corporation makes an offer, of at 
least equal value per share, to all holders of shares of such 
class or series and to all holders of any class or series into 
which the securities may be converted.  For purposes of this 
section, the average market price shall mean:  the average 
closing sale price during the 30 trading days immediately 
preceding the purchase of the shares in question (or if the 
person or persons have commenced a tender offer or have 
announced an intention to seek control of the publicly held 
corporation, during the 30 trading days preceding the earlier of 
the commencement of the tender offer or the making of the 
announcement), of a share 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 Securities Exchange Act of 1934 on which 
the shares are listed, or, if the shares are not listed on any 
such exchange, on the National Association of Securities 
Dealers, Inc. Automated Quotations National Market System, or, 
if the shares are not quoted on the National Association of 
Securities Dealers, Inc. Automated Quotations National Market 
System, the average closing bid quotation, during the 30 trading 
days preceding the purchase of the shares in question of a share 
on the National Association of Securities Dealers, Inc. 
Automated Quotations System or any system then in use (or if the 
person or persons have commenced a tender offer or have 
announced an intention to seek control of the publicly held 
corporation, during the 30 trading days preceding the earlier of 
the commencement of the tender offer or the making of the 
announcement), provided that if no quotation is available, the 
average market price shall be the fair market value on the date 
of purchase of the shares in question of a share as determined 
in good faith by the board of the publicly held corporation. 
    Sec. 24.  Minnesota Statutes 1986, section 302A.671, is 
amended to read:  
    302A.671 [CONTROL SHARE ACQUISITIONS.] 
    Subdivision 1.  [AUTHORIZATION IN ARTICLES.] (a) Unless 
otherwise expressly provided in the articles or in bylaws 
approved by the shareholders of an issuing public corporation, 
this section does not apply applies to a control share 
acquisition consummated, or a proposed control share acquisition 
with respect to which an information statement has been received 
by the issuing public corporation, on or before July 31, 1989. 
    Unless otherwise expressly provided in the articles or in 
bylaws approved by the shareholders of an issuing public 
corporation, this section does not apply to a control share 
acquisition consummated after July 31, 1989, with respect to 
which no information statement has been received by the issuing 
public corporation, on or before July 31, 1989. 
    (b) All shares acquired by an acquiring person in violation 
of subdivision 4 shall be denied voting rights for one year 
after acquisition, the shares shall be nontransferable on the 
books of the corporation for one year after acquisition and the 
corporation shall, during the one-year period, have the option 
to call the shares for redemption at the price at which the 
shares were acquired.  Such a redemption shall occur on the date 
set in the call notice but not later than 60 days after the call 
notice is given.  The shares of an issuing public corporation 
acquired by an acquiring person in a control share acquisition 
that exceed the threshold of voting power of any of the ranges 
specified in subdivision 2, paragraph (d), shall have only the 
voting rights as shall be accorded to them pursuant to 
subdivision 4a.  
    Subd. 2.  [INFORMATION STATEMENT.] An acquiring person 
shall deliver to the issuing public corporation at its principal 
executive office an information statement containing all of the 
following:  
    (a) the identity of the acquiring person, including the 
identity of each member of any partnership, limited partnership, 
syndicate, or other group constituting the acquiring person, and 
the identity of each affiliate and associate of the acquiring 
person, including the identity of each affiliate and associate 
of each member of such partnership, syndicate, or other group;  
    (b) a reference that the information statement is made 
under this section;  
    (c) the number and class or series of shares of the issuing 
public corporation beneficially owned, directly or indirectly, 
before the control share acquisition by the acquiring person 
each of the persons identified pursuant to paragraph (a); 
    (d) a the number and class or series of shares of the 
issuing public corporation acquired or proposed to be acquired 
pursuant to the control share acquisition by each of the persons 
identified pursuant to paragraph (a) and specification of which 
of the following ranges of voting power in the election of 
directors that, except for this section, resulted or would 
result from consummation of the control share acquisition:  
    (1) at least 20 percent but less than 33-1/3 percent;  
    (2) at least 33-1/3 percent but less than or equal to 50 
percent;  
    (3) over 50 percent; and 
    (e) the terms of the proposed control share acquisition or 
proposed control share acquisition, including, but not limited 
to, the source of funds or other consideration and the material 
terms of the financial arrangements for the control share 
acquisition, plans or proposals of the acquiring 
person (including plans or proposals under consideration) to 
liquidate or dissolve the issuing public corporation, to sell 
all or substantially all a substantial part of its assets, or 
merge it or exchange its shares with any other person, to change 
the location of its principal place of business or its principal 
executive office or of a material portion of its business 
activities, to change materially its management or policies of 
employment, to change materially its charitable or community 
contributions or its policies, programs, or practices relating 
thereto, to alter change materially its relationship with 
suppliers or customers or the communities in which it operates, 
or to make any other material change in its business, corporate 
structure, management or personnel, and such other objective 
facts as would be substantially likely to affect the decision of 
a shareholder with respect to voting on the proposed control 
share acquisition. 
    If any material change occurs in the facts set forth in the 
information statement, including but not limited to any material 
increase or decrease in the number of shares of the issuing 
public corporation acquired or proposed to be acquired by the 
persons identified pursuant to paragraph (a), the acquiring 
person shall promptly deliver to the issuing public corporation 
at its principal executive office an amendment to the 
information statement containing information relating to such 
material change.  An increase or decrease or proposed increase 
or decrease equal, in the aggregate for all persons identified 
pursuant to paragraph (a), to one percent or more of the total 
number of outstanding shares of any class or series of the 
issuing public corporation shall be deemed "material" for 
purposes of this paragraph; an increase or decrease or proposed 
increase or decrease of less than this amount may be material, 
depending upon the facts and circumstances. 
    Subd. 3.  [MEETING OF SHAREHOLDERS.] If the acquiring 
person so requests in writing at the time of delivery of an 
information statement pursuant to subdivision 2, and has made, 
or has made a bona fide written offer to make, a control share 
acquisition and gives a written undertaking to pay or reimburse 
the issuing public corporation's expenses of a special meeting, 
except the expenses of the issuing public corporation in 
opposing approval of the control share acquisition, within five 
ten days after receipt by the issuing public corporation of an 
the information statement pursuant to subdivision 2, a special 
meeting of the shareholders of the issuing public corporation 
shall be called pursuant to section 302A.433, subdivision 1, to 
vote on the proposed control share acquisition for the purpose 
of considering the voting rights to be accorded to shares 
referred to in subdivision 1, paragraph (b), acquired or to be 
acquired pursuant to the control share acquisition.  The special 
meeting shall be held no later than 20 business 55 days after 
receipt of the information statement, unless the acquiring 
person agrees to a later date.  If the acquiring person so 
requests in writing at the time of delivery of the information 
statement, the special meeting shall not be held sooner than 30 
days after receipt by the issuing public corporation of the 
information statement.  If no request for a special meeting is 
made, consideration of the voting rights to be accorded to 
shares referred to in subdivision 1, paragraph (b), acquired or 
to be acquired pursuant to the control share acquisition shall 
be presented at the next special or annual meeting of the 
shareholders, unless prior thereto the matter of the voting 
rights becomes moot.  The notice of the meeting shall at a 
minimum be accompanied by a copy of the information statement 
(and a copy of any amendment to the information statement 
previously delivered to the issuing public corporation) and a 
statement disclosing that the board of directors of the issuing 
public corporation recommends acceptance approval of, expresses 
no opinion and is remaining neutral toward, recommends rejection 
of, or is unable to take a position with respect to according 
voting rights to shares referred to in subdivision 1, paragraph 
(b), acquired or to be acquired in the proposed control share 
acquisition.  The notice of meeting shall be given at least ten 
days prior to the meeting. 
    Subd. 4.  [CONSUMMATION OF CONTROL SHARE 
ACQUISITION FINANCING.] The acquiring person may consummate the 
proposed control share acquisition if and only if both of the 
following occur:  
    (1) the proposed control share acquisition is approved by 
the affirmative vote of the holders of a majority of the voting 
power of all shares entitled to vote.  
    A class or series of shares of the corporation is entitled 
to vote as a class or series if any provision of the control 
share acquisition would, if contained in a proposed amendment to 
the articles, entitle the class or series to vote as a class or 
series; and 
    (2) the proposed control share acquisition is consummated 
within 180 days after shareholder approval.  Notwithstanding 
anything to the contrary contained in this chapter, no call of a 
special meeting of the shareholders of the issuing public 
corporation shall be required to be made pursuant to subdivision 
3 and no consideration of the voting rights to be accorded to 
shares referred to in subdivision 1, paragraph (b), acquired or 
to be acquired pursuant to a control share acquisition shall be 
presented at any special or annual meeting of the shareholders 
of the issuing public corporation unless at the time of delivery 
of the information statement pursuant to subdivision 2, the 
acquiring person shall have entered into, and shall deliver to 
the issuing public corporation a copy or copies of, a definitive 
financing agreement or definitive financing agreements, with one 
or more responsible financial institution or other entity having 
the necessary financial capacity, for any financing of the 
control share acquisition not to be provided by funds of the 
acquiring person. 
    Subd. 4a.  [VOTING RIGHTS.] (a) Shares referred to in 
subdivision 1, paragraph (b), acquired in a control share 
acquisition shall have the same voting rights as other shares of 
the same class or series only if approved by resolution of 
shareholders of the issuing public corporation at a special or 
annual meeting of shareholders pursuant to subdivision 3. 
    (b) The resolution of shareholders must be approved by (1) 
the affirmative vote of the holders of a majority of the voting 
power of all shares entitled to vote, and (2) the affirmative 
vote of the holders of a majority of the voting power of all 
shares entitled to vote excluding all interested shares.  A 
class or series of shares of the issuing public corporation is 
entitled to vote separately as a class or series if any 
provision of the control share acquisition would, if contained 
in a proposed amendment to the articles, entitle the class or 
series to vote separately as a class or series. 
    (c) To have the voting rights accorded by approval of a 
resolution of shareholders, any proposed control share 
acquisition not consummated prior to the time of the shareholder 
approval must be consummated within 180 days after the 
shareholder approval. 
    (d) Any shares referred to in subdivision 1, paragraph (b), 
acquired in a control share acquisition that do not have voting 
rights accorded to them by approval of a resolution of 
shareholders shall regain their voting rights upon transfer to a 
person other than the acquiring person or any affiliate or 
associate of the acquiring person unless the acquisition of the 
shares by the other person constitutes a control share 
acquisition, in which case the voting rights of the shares are 
subject to the provisions of this section. 
    Subd. 5.  [RIGHTS OF ACTION.] An acquiring person, an 
issuing public corporation, and shareholders of an issuing 
public corporation may sue at law or in equity to enforce the 
provisions of this section and section 302A.449, subdivision 7.  
    Subd. 6.  [RETURN OF SHARES IF ACQUISITION NOT 
CONSUMMATED REDEMPTION.] If the proposed control share 
acquisition is not consummated in accordance with this section, 
the acquiring person shall immediately return any and all shares 
held in anticipation of the consummation to the shareholders 
from whom the person received the shares.  Unless otherwise 
expressly provided in the articles or in bylaws approved by the 
shareholders of an issuing public corporation, the issuing 
public corporation shall have the option to call for redemption 
all but not less than all shares referred to in subdivision 1, 
paragraph (b), acquired in a control share acquisition, at a 
redemption price equal to the market value of the shares at the 
time the call for redemption is given, in the event (1) an 
information statement has not been delivered to the issuing 
public corporation by the acquiring person by the tenth day 
after the control share acquisition, or (2) an information 
statement has been delivered but the shareholders have voted not 
to accord voting rights to such shares pursuant to subdivision 
4a, paragraph (b).  The call for redemption shall be given by 
the issuing public corporation within 30 days after the event 
giving the issuing public corporation the option to call the 
shares for redemption and the shares shall be redeemed within 60 
days after the call is given. 
    Sec. 25.  [302A.673] [BUSINESS COMBINATIONS.] 
    Subdivision 1.  [BUSINESS COMBINATION WITH INTERESTED 
SHAREHOLDER; APPROVAL BY DIRECTORS.] (a) Notwithstanding 
anything to the contrary contained in this chapter (except the 
provisions of subdivision 3), an issuing public corporation may 
not engage in any business combination, or vote, consent or 
otherwise act to authorize a subsidiary of the issuing public 
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 issuing public 
corporation or any affiliate or associate of the interested 
shareholder for a period of five years following the interested 
shareholder's share acquisition date unless the business 
combination or the acquisition of shares made by the interested 
shareholder on the interested shareholder's share acquisition 
date is approved by a committee of the board of the issuing 
public corporation before the interested shareholder's share 
acquisition date.  The committee shall be formed in accordance 
with paragraph (d). 
    (b) If a good faith definitive proposal regarding a 
business combination is made in writing to the board of the 
issuing public corporation, a committee of the board formed in 
accordance with paragraph (d) shall consider and take action on 
the proposal and respond in writing within 45 days after receipt 
of the proposal by the issuing public corporation, or a shorter 
period, if any, as may be required by the Securities Exchange 
Act of 1934 or rules and regulations under that act, setting 
forth its decision regarding the proposal. 
    (c) If a good faith definitive proposal to acquire shares 
is made in writing to the board of the issuing public 
corporation, a committee of the board formed in accordance with 
paragraph (d), shall consider and take action on the proposal.  
Unless the committee responds affirmatively in writing within 45 
days after receipt of the proposal by the issuing public 
corporation, or a shorter period, if any, as may be required by 
the Securities Exchange Act of 1934 or rules and regulations 
under that act, the committee shall be considered to have 
disapproved the share acquisition. 
    (d)(1) When a business combination or acquisition of shares 
is proposed pursuant to this subdivision, the board shall 
promptly form a committee composed of all of the board's 
disinterested directors.  The committee shall take action on the 
proposal by the affirmative vote of a majority of committee 
members.  No larger proportion or number of votes shall be 
required.  Notwithstanding the provisions of section 302A.241, 
subdivision 1, the committee shall not be subject to any 
direction or control by the board with respect to the 
committee's consideration of, or any action concerning, a 
business combination or acquisition of shares pursuant to this 
section. 
    (2) A committee formed pursuant to this subdivision shall 
be composed of one or more members.  Only disinterested 
directors may be members of a committee formed pursuant to this 
subdivision.  However, if the board has no disinterested 
directors, the board shall select three or more disinterested 
persons to be committee members. 
    (3) For purposes of this subdivision, a director or person 
is "disinterested" if the director or person is not a present or 
former officer or employee of the issuing public corporation, or 
a related corporation. 
    Subd. 2.  [REQUIREMENTS AFTER FIVE YEARS.] Notwithstanding 
anything to the contrary contained in this chapter (except the 
provisions of subdivisions 1 and 3), an issuing public 
corporation may not engage at any time in any business 
combination, or vote, consent or otherwise act to authorize a 
subsidiary of the issuing public 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 issuing public corporation or any affiliate 
or associate of the interested shareholder other than a business 
combination meeting all requirements of this chapter, the 
articles of the issuing public corporation and the requirements 
specified in any of the following: 
    (a) A business combination approved by the board of the 
issuing public corporation before the interested shareholder's 
share acquisition date, or as to which the acquisition of shares 
made by the interested shareholder on the interested 
shareholder's share acquisition date had been approved by the 
board of the issuing public corporation before the interested 
shareholder's share acquisition date. 
    (b) A business combination approved by the affirmative vote 
of the holders of a majority of the outstanding shares entitled 
to vote 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 five years after the interested shareholder's share 
acquisition date. 
    (c) A business combination, with respect to which the 
consummation date is no earlier than five years after the 
interested shareholder's share acquisition date, that meets all 
of the following conditions: 
    (1) 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 common shares of 
the issuing public 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 shares entitled to vote of the issuing 
public corporation, for any common shares of the same class or 
series acquired by it within the five-year period immediately 
before the announcement date with respect to the business 
combination or within the five-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 common share 
since the earliest date, up to the amount of the interest; 
    (ii) the market value per common share 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 common share 
since that date, up to the amount of the interest. 
     (2) 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 shares, of the 
issuing public corporation in the business combination 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): 
    (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 shares entitled to vote of the issuing 
public corporation, for any shares of the class or series 
acquired by it within the five-year period immediately before 
the announcement date with respect to the business combination 
or within the five-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 since such 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 are entitled in the 
event of any voluntary liquidation, dissolution, or winding up 
of the issuing public corporation; plus the aggregate amount of 
any unpaid 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 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 the class or series since that date, up to the amount of the 
interest. 
     (3) The consideration to be received by holders of a 
particular class or series of outstanding shares (including 
common shares) of the issuing public 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 is distributed promptly. 
     (4) The holders of all outstanding shares of the issuing 
public corporation not beneficially owned by the interested 
shareholder immediately before the consummation date with 
respect to the business combination are entitled to receive in 
the business combination cash or other consideration for the 
shares in compliance with paragraph (c), clauses (1), (2), and 
(3). 
     (5) 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 shares entitled to vote 
of the issuing public 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 section 302A.011, 
subdivision 46, paragraph (f); 
    (iii) through a business combination meeting all of the 
conditions of subdivision 1 and subdivision 2, paragraph (c); 
    (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 requirements of paragraph (c), clauses (1), 
(2), and (3). 
    Subd. 3.  [APPLICATION.] (a) Unless by express provision 
electing to be subject to this section contained in the articles 
or in bylaws approved by the shareholders of an issuing public 
corporation, this section does not apply to any business 
combination of an issuing public corporation, that is not, at 
any time during the period from the effective date of this 
section until adoption of the article or bylaw provision, a 
publicly held corporation.  If the article or bylaw provision 
electing to be subject to this section expressly so provides, 
this section shall not apply to any business combination with an 
interested shareholder whose share acquisition date is before 
the effective date of the article or bylaw provision.  
     (b) This section does not apply to any business combination 
of an issuing public corporation: 
     (1) if the original articles or bylaws of the issuing 
public corporation contain a provision expressly electing not to 
be subject to this section; 
    (2) if the board of the issuing public corporation adopts, 
prior to September 1, 1987, an amendment to the issuing public 
corporation's bylaws expressly electing not to be subject to 
this section; 
    (3) if an amendment to the articles or bylaws of the 
issuing public corporation is approved by the shareholders, 
other than interested shareholders and their affiliates and 
associates, holding a majority of the outstanding voting power 
of all shares entitled to vote, excluding the shares of 
interested shareholders and their affiliates and associates, 
expressly electing not to be subject to this section and such 
amendment provides that it is not to be effective until 18 
months after the vote of shareholders, or August 1, 1989, 
whichever date is earlier, and provides that, except as provided 
in paragraph (d), it does not apply to any business combination 
of the issuing public corporation with an interested shareholder 
whose share acquisition date is on or before the effective date 
of the amendment; or 
     (4) if the business combination was consummated before, or 
if a binding agreement for the business combination was entered 
into before, the day following final enactment of this section. 
     (c) This section does not apply to any business combination 
of an issuing public corporation with an interested shareholder 
of the issuing public corporation who became an interested 
shareholder inadvertently, if the interested shareholder: 
     (1) as soon as practicable, divests itself of a sufficient 
amount of the shares entitled to vote of the issuing public 
corporation so that it no longer is the beneficial owner, 
directly or indirectly, of ten percent or more of the 
outstanding shares entitled to vote of the issuing public 
corporation, and 
     (2) would not at any time within the five-year period 
preceding the announcement date with respect to the business 
combination have been an interested shareholder but for the 
inadvertent acquisition. 
    (d) This section does not apply to any business combination 
of an issuing public corporation with an interested shareholder 
that was the beneficial owner, directly or indirectly, of ten 
percent or more of the outstanding shares entitled to vote of 
the issuing public corporation on June 1, 1987. 
    (e) Unless the articles or bylaws approved by the 
shareholders of the issuing public corporation otherwise 
provide, this section does not apply to any business combination 
of an issuing public corporation 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 if the interested shareholder's share 
acquisition date is on or after August 1, 1989, or an affiliate 
or associate of that interested shareholder. 
    Sec. 26.  [REPEALER.] 
    Laws 1985, First Special Session chapter 5, section 21, as 
amended by Laws 1986, chapter 431, section 4, and Laws 1987, 
chapter 12, is repealed.  
    Sec. 27.  [EFFECTIVE DATE.] 
    Notwithstanding Minnesota Statutes 1986, section 645.21, 
sections 1 to 18, 20, 21, and 24 to 26 are effective retroactive 
to June 1, 1987.  Section 19 is effective the day following 
final enactment.  Sections 22 and 23 are effective March 1, 1988.
    Approved June 25, 1987