2002 Minnesota Statutes

     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 
 written or oral agreement, arrangement, relationship, 
 understanding, or otherwise with, any interested shareholder of 
 the issuing public corporation or any affiliate or associate of 
 the interested shareholder for a period of four 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 before the interested shareholder's 
 share acquisition date, or on the share acquisition date but 
 prior to the interested shareholder's becoming an interested 
 shareholder on the share acquisition date, by a committee of the 
 board of the issuing public corporation 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 30 days after receipt 
 of the proposal by the issuing public corporation, 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.  

    (d)(1) When a business combination or acquisition of shares 
 is proposed pursuant to this subdivision, the board shall 
 promptly form a committee composed solely of one or more 
 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) 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 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 organization. 

    Subd. 2. Repealed, 1988 c 692 s 19 

    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 June 1, 1987, until 
 adoption of the article or bylaw provision, a publicly held 
 corporation. 

    (b) Except as provided in paragraph (c), this section does 
 not apply to any business combination of an issuing public 
 corporation: 

    (1) if, 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 
 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 the 
 amendment provides that it is not to be effective until 18 
 months after the vote of shareholders and provides that, except 
 as provided in paragraph (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 June 1, 1987.  

    (c) 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 written or oral 
 agreement, arrangement, relationship, understanding, or 
 otherwise with: 

    (1) any person that would have been an interested 
 shareholder on June 1, 1987, had this section been in effect on 
 this date and had the issuing public corporation been an issuing 
 public corporation on this date; 

    (2) any interested shareholder whose share acquisition date 
 is either before the effective date of the article or bylaw 
 provision by which an issuing public corporation that was not 
 subject to this section immediately prior to the election 
 elected to be subject to this section, or on the effective date, 
 but prior to the effective time of the article or bylaw 
 provision; or 

    (3) in the case of a corporation that was not subject to 
 this section immediately prior to becoming a publicly held 
 corporation, any interested shareholder whose share acquisition 
 date is either before the date on which the corporation becomes 
 a publicly held corporation or on that date, but prior to the 
 time the corporation becomes a publicly held corporation, and to 
 whom the application of this section is expressly excluded by an 
 amendment to the articles or bylaws of the corporation approved 
 by the shareholders before the corporation becomes a publicly 
 held corporation and, if expressly provided by the amendment to 
 the articles or bylaws, any affiliate or associate of an 
 interested shareholder described in this clause. 

    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.  Also, 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 at the effective time of the amendment if this 
 section had been applicable. 

    HIST: 1Sp1987 c 1 s 25; 1988 c 692 s 17,18; 1989 c 172 s 9,10; 
 1993 c 17 s 53,54; 1993 c 137 s 16; 1994 c 417 s 7; 1997 c 10 
 art 1 s 31; 2002 c 311 art 1 s 26