Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 692-H.F.No. 2253 
           An act relating to corporations; making certain 
          corrections to shareholder protection and corporate 
          take-over legislation; eliminating restrictions on 
          certain business combinations with an interested 
          shareholder after five years; applying the control 
          share acquisition and business combination statutes to 
          certain issuing public corporations; amending 
          Minnesota Statutes 1986, section 80B.03, subdivisions 
          1 and 6; Minnesota Statutes 1987 Supplement, sections 
          302A.011, subdivisions 37, 41, 42, 46, 49, 50, and 51; 
          302A.471, subdivision 1; 302A.553, subdivision 3; 
          302A.671, subdivisions 1, 2, 3, 4, and 4a; and 
          302A.673, subdivisions 1 and 3; repealing Minnesota 
          Statutes 1987 Supplement, section 302A.673, 
          subdivision 2. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 80B.03, 
subdivision 1, is amended to read:  
    Subdivision 1.  It is unlawful for any person to make a 
takeover offer or to acquire any equity securities pursuant to 
the offer, unless the offer is effective under sections 80B.01 
to 80B.13.  A takeover offer is effective when the offeror files 
with the commissioner a registration statement containing the 
information prescribed in subdivisions 2 and 6.  The offeror 
shall deliver a copy of the registration statement by personal 
service to the target company at its principal office and 
publicly disclose the material terms of the proposed offer, not 
later than the date of filing of the registration statement.  
Public disclosure shall require, at a minimum, that a copy of 
the registration statement be supplied to all broker-dealers 
maintaining an office in this state currently quoting the 
security The offeror shall send or deliver to all offerees as 
soon as practicable after the filing, the material terms of the 
proposed offer and the information specified in subdivision 6.  
    Sec. 2.  Minnesota Statutes 1986, section 80B.03, 
subdivision 6, is amended to read:  
    Subd. 6.  The form required to be filed by subdivision 2, 
clause (a), shall contain the following information:  
    (a) the identity and background of all persons on whose 
behalf the acquisition of any equity security of the issuer 
target company has been or is to be affected effected including 
the identity and background of each member of a partnership, 
limited partnership, syndicate, or other group constituting the 
person and the identity and background of each affiliate and 
associate of the person, including the identity and background 
of each affiliate and associate of each member of the 
partnership, syndicate, or other group; provided, however, that 
with respect to a limited partnership, the information need only 
be given with respect to a partner who is denominated or 
functions as a general partner and each affiliate and associate 
of the general partner; 
    (b) the source and amount of funds or other consideration 
used or to be used in acquiring any equity security, including, 
if applicable, a statement describing any securities which are 
being offered in exchange for the equity securities of the 
issuer, and if any part of the acquisition price is or will be 
represented by borrowed funds or other consideration, a 
description of the material terms of any financing arrangements 
and the names of the parties from whom the funds were 
borrowed the material terms of the financial arrangements for 
the take-over; 
    (c) if the purpose of the acquisition is to gain control of 
the target company, a statement of plans or proposals which the 
person has, upon gaining control, to liquidate the issuer, sell 
its assets, effect its merger or consolidation, to change the 
location of its principal executive office or of a material 
portion of its business activities, to change its management or 
policies of employment, to materially alter its relationship 
with suppliers or customers or the communities in which it 
operates, or make any other major change in its business, 
corporate structure, management or personnel, and such other 
objective facts as would be substantially likely to affect a 
reasonable shareholder's evaluation of the takeover offer any 
plans or proposals of any person identified under paragraph (a), 
including plans or proposals under consideration, to (1) 
liquidate or dissolve the target company, (2) sell all or a 
substantial part of its assets, or merge it or exchange its 
shares with another person, (3) change the location of its 
principal place of business or its principal executive office or 
of a material portion of its business activities, (4) change 
materially its management or policies of employment, (5) change 
materially its charitable or community contributions or related 
policies, programs, or practices, (6) change materially its 
relationship with suppliers or customers or the communities in 
which it operates, or (7) make any other material change in its 
business, corporate structure, management or personnel, and 
other objective facts as would be substantially likely to affect 
the decision of a shareholder with respect to the take-over 
offer; 
    (d) the number of shares or units of any equity security of 
the issuer owned beneficially by the person and any affiliate or 
associate of the person, together with the name and address of 
each affiliate or associate; 
    (e) the material terms of any contract, arrangement, or 
understanding with any other person with respect to the equity 
securities of the issuer whereby the person filing the statement 
has or will acquire any interest in additional equity securities 
of the issuer, or is or will be obligated to transfer any 
interest in the equity securities to another and class or series 
of shares of the target company beneficially owned, directly or 
indirectly, by each of the persons identified under paragraph 
(a). 
    Sec. 3.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 37, is amended to read:  
    Subd. 37.  [ACQUIRING PERSON.] "Acquiring person" means a 
person that 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 written or oral agreement, arrangement, relationship, 
understanding, or otherwise (whether or not in writing) for the 
purposes of acquiring, owning, or voting shares of an issuing 
public corporation, all members of the partnership, syndicate, 
or other group constitute a "person." 
    "Acquiring person" does not include (a) 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, or (b) a person who becomes entitled 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), solely as a result of a repurchase of shares by, 
or recapitalization of, the issuing public corporation or 
similar action unless (1) the repurchase, recapitalization, or 
similar action was proposed by or on behalf of, or pursuant to 
any written or oral agreement, arrangement, relationship, 
understanding, or otherwise with, the person or any affiliate or 
associate of the person or (2) the person thereafter acquires 
beneficial ownership, directly or indirectly, of outstanding 
shares entitled to vote of the issuing public corporation and, 
immediately after the acquisition, is entitled to exercise or 
direct the exercise of the same or a higher range of voting 
power under section 302A.671, subdivision 2, paragraph (d), as 
the person became entitled to exercise as a result of the 
repurchase, recapitalization, or similar action. 
    Sec. 4.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 41, is amended to read:  
    Subd. 41.  [BENEFICIAL OWNER; BENEFICIAL OWNERSHIP.] (a) 
"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 written or oral agreement, 
arrangement, relationship, understanding, or otherwise (whether 
or not in writing), has or shares the power to vote, or direct 
the voting of, the shares or securities and/or or has or shares 
the power to dispose of, or direct the disposition of, the 
shares or securities, provided except that (1) 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 (2) 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.  
    (b) "Beneficial ownership" includes, but is not limited to, 
the right 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 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 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 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 the person, any trust or estate in which 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 the person owns ten 
percent or more of the equity, and any affiliate of the person. 
    (c) When two or more persons act or agree to act as a 
partnership, limited partnership, syndicate, or other group for 
the purposes of acquiring, owning, or voting shares or other 
securities of a corporation, all members of the partnership, 
syndicate, or other group are deemed to constitute a "person" 
and to have acquired beneficial ownership, as of the date they 
first so act or agree to act together, of all shares or 
securities of the corporation beneficially owned by the person. 
    Sec. 5.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 42, is amended to read:  
    Subd. 42.  [INTERESTED SHARES.] "Interested shares" means 
the shares of an issuing public corporation with respect to 
which beneficially owned by 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 the 
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. 6.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 46, is amended 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 but excluding (1) the merger of a wholly-owned 
subsidiary of the issuing public corporation into the issuing 
public corporation or, (2) the merger of two or more 
wholly-owned subsidiaries of the issuing public corporation, or 
(3) the merger of a corporation, other than an interested 
shareholder or an affiliate or associate of an interested 
shareholder, with a wholly-owned subsidiary of the issuing 
public corporation pursuant to which the surviving corporation, 
immediately after the merger, becomes a wholly-owned subsidiary 
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 or other securities of 
the issuing public corporation or any subsidiary of the issuing 
corporation or money, or other property for shares, other 
securities, money, or property 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, but 
excluding the exchange of shares of a corporation, other than an 
interested shareholder or an affiliate or associate of an 
interested shareholder, pursuant to which the corporation, 
immediately after the exchange, becomes a wholly-owned 
subsidiary of the issuing public corporation; 
    (c) any sale, lease, exchange, mortgage, pledge, transfer, 
or other disposition (in a single transaction or a series of 
transactions), other than sales of goods or services in the 
ordinary course of business or redemptions pursuant to section 
302A.671, subdivision 6, to or with the interested shareholder 
or any affiliate or associate of the interested shareholder, 
other than to or with the issuing public corporation or a 
wholly-owned subsidiary of the issuing public corporation, 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 except a cash dividend or distribution paid 
or made pro rata to all shareholders 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 other than for 
the purpose, directly or indirectly, of facilitating or 
effecting a subsequent transaction that would have been a 
business combination if the dividend or distribution had not 
been made; 
    (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 written or oral agreement, arrangement, or relationship, 
understanding, or otherwise (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 written or oral agreement, 
arrangement, or relationship, understanding, or 
otherwise (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. 7.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 49, is amended 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.  Notwithstanding anything stated in this 
subdivision, if a person who has not been a beneficial owner of 
ten percent or more of the voting power of the outstanding 
shares entitled to vote of the issuing public corporation 
immediately prior to a repurchase of shares by, or 
recapitalization of, the issuing public corporation or similar 
action shall become a beneficial owner of ten percent or more of 
the voting power solely as a result of the share repurchase, 
recapitalization, or similar action, the person shall not be 
deemed to be the beneficial owner of ten percent or more of the 
voting power for purposes of clause (1) or (2) unless: 
    (i) the repurchase, recapitalization, conversion, or 
similar action was proposed by or on behalf of, or pursuant to 
any agreement, arrangement, relationship, understanding, or 
otherwise (whether or not in writing) with, the person or any 
affiliate or associate of the person; or 
    (ii) the person thereafter acquires beneficial ownership, 
directly or indirectly, of outstanding shares entitled to vote 
of the issuing public corporation and, immediately after the 
acquisition, is 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.  
    Sec. 8.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 50, is amended to read:  
    Subd. 50.  [MARKET VALUE.] "Market value," when used in 
reference to shares or other property of any issuing public 
corporation, means the following:  
    (1) in the case of shares, the highest average closing sale 
price of a share on the composite tape for New York Stock 
Exchange listed shares during the 30-day period 30 trading days 
immediately preceding the date in question or, with respect to 
the references in section 302A.553, subdivision 3, if a person 
or persons selling the shares have commenced a tender offer or 
have announced an intention to seek control of the 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 highest average closing bid quotation during the 30-day 
period 30 trading days preceding the date 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, with respect to the reference in section 302A.553, 
subdivision 3, if the person or persons selling the shares shall 
have commenced a tender offer or have announced an intention to 
seek control of the 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 such 
quotation is available, the market value is the fair market 
value on the date in question of a share the shares 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. 9.  Minnesota Statutes 1987 Supplement, section 
302A.011, subdivision 51, is amended 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; 
provided, however, that in the event a person becomes, on one or 
more dates, an interested shareholder of the issuing public 
corporation, but thereafter ceases to be an interested 
shareholder of the issuing public corporation, and subsequently 
again becomes an interested shareholder, "share acquisition 
date," with respect to that person means the date on which the 
person most recently became an interested shareholder of the 
issuing public corporation. 
    Sec. 10.  Minnesota Statutes 1987 Supplement, section 
302A.471, subdivision 1, is amended to read: 
    Subdivision 1.  [ACTIONS CREATING RIGHTS.] A shareholder of 
a corporation may dissent from, and obtain payment for the fair 
value of the shareholder's shares in the event of, any of the 
following corporate actions:  
    (a) An amendment of the articles that materially and 
adversely affects the rights or preferences of the shares of the 
dissenting shareholder in that it:  
    (1) alters or abolishes a preferential right of the shares; 
    (2) creates, alters, or abolishes a right in respect of the 
redemption of the shares, including a provision respecting a 
sinking fund for the redemption or repurchase of the shares;  
    (3) alters or abolishes a preemptive right of the holder of 
the shares to acquire shares, securities other than shares, or 
rights to purchase shares or securities other than shares;  
    (4) excludes or limits the right of a shareholder to vote 
on a matter, or to cumulate votes, except as the right may be 
limited by dilution through the issuance of securities with 
similar voting rights; except that an amendment to the articles 
of an issuing public corporation that provides that section 
302A.671 does not apply to a control share acquisition does not 
give rise to the right to obtain payment under this section; 
    (b) A sale, lease, transfer, or other disposition of all or 
substantially all of the property and assets of the corporation 
not made in the usual or regular course of its business, but not 
including a disposition in dissolution described in section 
302A.725, subdivision 2, or a disposition pursuant to an order 
of a court, or a disposition for cash on terms requiring that 
all or substantially all of the net proceeds of disposition be 
distributed to the shareholders in accordance with their 
respective interests within one year after the date of 
disposition;  
    (c) A plan of merger to which the corporation is a party, 
except as provided in subdivision 3;  
    (d) A plan of exchange to which the corporation is a party 
as the corporation whose shares will be acquired by the 
acquiring corporation, if the shares of the shareholder are 
entitled to be voted on the plan; or 
    (e) Any other corporate action taken pursuant to a 
shareholder vote with respect to which the articles, the bylaws, 
or a resolution approved by the board directs that dissenting 
shareholders may obtain payment for their shares. 
    Sec. 11.  Minnesota Statutes 1987 Supplement, section 
302A.553, subdivision 3, is amended 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 written 
or oral 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 value 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 
the 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. 12.  Minnesota Statutes 1987 Supplement, section 
302A.671, subdivision 1, is amended to read:  
    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 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 1990. 
    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 1990, with respect 
to which no information statement has been received by the 
issuing public corporation, on or before July 31, 1989 1990. 
    (b) 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. 
    Sec. 13.  Minnesota Statutes 1987 Supplement, section 
302A.671, subdivision 2, is amended to read:  
    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 and background of the acquiring person, 
including the identity and background of each member of any 
partnership, limited partnership, syndicate, or other group 
constituting the acquiring person, and the identity and 
background of each affiliate and associate of the acquiring 
person, including the identity and background of each affiliate 
and associate of each member of such partnership, syndicate, or 
other group; provided, however, that with respect to a limited 
partnership, the information need only be given with respect to 
a partner who is denominated or functions as a general partner 
and each affiliate and associate of the general partner; 
    (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 each of the persons 
identified pursuant to paragraph (a); 
    (d) 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 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 (1) liquidate or dissolve the 
issuing public corporation, to (2) sell all or a substantial 
part of its assets, or merge it or exchange its shares with any 
other person, to (3) change the location of its principal place 
of business or its principal executive office or of a material 
portion of its business activities, to (4) change materially its 
management or policies of employment, to (5) change materially 
its charitable or community contributions or its policies, 
programs, or practices relating thereto, to (6) change 
materially its relationship with suppliers or customers or the 
communities in which it operates, or to (7) 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 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 
the 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. 
    Sec. 14.  Minnesota Statutes 1987 Supplement, section 
302A.671, subdivision 3, is amended to read:  
    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 according voting rights with respect to 
shares acquired or to be acquired in the control share 
acquisition, within ten days after receipt by the issuing public 
corporation of the information statement, a special meeting of 
the shareholders of the issuing public corporation shall be 
called pursuant to section 302A.433, subdivision 1, for the sole 
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 55 days after 
receipt of the information statement and written undertaking to 
pay or reimburse the issuing public corporation's expenses of 
the special meeting, 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.  The record date for the meeting must be at least 30 
days prior to the date of the meeting.  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 the 
issuing public corporation recommends 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 control share 
acquisition.  The notice of meeting shall be given at least ten 
days prior to the meeting.  Any amendments to the information 
statement received after mailing of the notice of the meeting 
must be mailed promptly to the shareholders by the issuing 
public corporation. 
    Sec. 15.  Minnesota Statutes 1987 Supplement, section 
302A.671, subdivision 4, is amended to read:  
    Subd. 4.  [FINANCING.] 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 institutions or other 
entity entities having the necessary financial capacity, for any 
financing of the control share acquisition not to be provided by 
funds of the acquiring person.  A financing agreement is not 
deemed not definitive for purposes of this subdivision solely 
because it contains conditions or contingencies customarily 
contained in term loan agreements with financial institutions. 
    Sec. 16.  Minnesota Statutes 1987 Supplement, section 
302A.671, subdivision 4a, is amended to read:  
    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 including all shares held 
by the acquiring person, 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. 
    Sec. 17.  Minnesota Statutes 1987 Supplement, section 
302A.673, subdivision 1, is amended to read:  
    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 written or oral agreement, arrangement, or relationship, 
understanding, or otherwise (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 30 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 and respond in writing within 30 days after receipt of 
the proposal by the issuing public corporation, setting forth 
its decision regarding 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.  Committee members are deemed 
to be directors for purposes of sections 302A.251, 302A.255, and 
302A.521. 
    (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 neither an officer nor an employee, 
nor has been an officer or employee within five years preceding 
the formation of the committee pursuant to this section, of the 
issuing public corporation, or of a related corporation. 
    Sec. 18.  Minnesota Statutes 1987 Supplement, section 
302A.673, subdivision 3, is amended to read: 
    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) Except as provided in paragraph (c), this section does 
not apply to any business combination of an issuing public 
corporation: 
    (1) if the original, prior to the time the issuing public 
corporation becomes a publicly held corporation or becomes 
subject to this section by virtue of an election under paragraph 
(a), including any time prior to the time that the corporation 
becomes an issuing public corporation, 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 
the amendment provides that it is not to be effective until 18 
months after the vote of shareholders, or August 1, 1989 1990, 
whichever date is earlier, and provides that, except as provided 
in paragraph (d) (c), 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) (c) 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 respect to, proposed by or on behalf of, or pursuant to any 
written or oral agreement, arrangement, relationship, 
understanding, or otherwise with any person that would have been 
an interested shareholder on June 1, 1987, had this section been 
in effect on this date. 
     This section applies to any business combination of an 
issuing public corporation to which it previously did not apply 
because of provisions in articles or bylaws adopted or approved 
under paragraph (b), clause (1), (2), or (3), upon an amendment 
to the articles or bylaws approved by shareholders holding a 
majority of the outstanding voting power of all shares entitled 
to vote expressly electing to be subject to this section 
becoming effective.  This section does not apply to any business 
combination of the corporation with, with respect to, proposed 
by or on behalf of, or pursuant to any written or oral 
agreement, arrangement, relationship, understanding, or 
otherwise with any person that would have been an interested 
shareholder on the effective date of the amendment if this 
section had been applicable. 
    (e) (d) 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 1990, or an 
affiliate or associate of that interested shareholder. 
    Sec. 19.  [REPEALER.] 
    Minnesota Statutes 1987 Supplement, section 302A.673, 
subdivision 2, is repealed. 
    Approved April 28, 1988