2023 Massachusetts General Laws › Part I - Administration of the Government › Title XV - Regulation of Trade › Chapter 110f - Business Combinations With Interested Shareholders › Section 2 - Applicability of Restrictions; Notice; Election to Be Governed by This Chapter

Section 2. The restrictions contained in section one shall not apply if:
(a) the corporation's original articles of organization contain a provision expressly electing not to be governed by this section;
(b) the corporation, by action of its board of directors, adopts an amendment to its by-laws within ninety days of the effective date of this chapter, expressly electing not to be governed by this chapter, which amendment shall not be further amended by the board of directors;
(c) the corporation, by action of its stockholders, adopts an amendment of its articles of organization or by-laws expressly electing not to be governed by this chapter; provided, however, that in addition to any other vote required by law, such amendment to the articles of organization or by-laws must be approved by the affirmative vote of a majority of the shares entitled to vote. An amendment adopted pursuant to this paragraph shall not be effective until twelve months after the adoption of such amendment and shall not apply to any business combination between such corporation and any person who became an interested stockholder of such corporation on or prior to the date of such adoption. A by-law amendment adopted pursuant to this paragraph shall not be further amended by the board of directors;
(d) the corporation does not have two hundred or more stockholders of record;
(e) the corporation does not have: (1) its principal executive office or substantial assets within the commonwealth unless as a result of action taken directly or indirectly by an interested stockholder; and (2) either more than ten percent of its stockholders of record residing within the commonwealth or more than ten percent of its issued and outstanding shares owned of record by residents of the commonwealth.
The record date for determining the percentages and numbers of stockholders and shares specified in subsections (d) and (e) shall be the last stockholder record date before any stockholder became an interested stockholder. A stockholder record date is the date fixed by the board of directors or, if applicable, the date when transfer books are closed by the board of directors, in connection with determining stockholders entitled to notice of and vote at a meeting, or to consent or dissent, to receive any dividend or other distribution, or for the purpose of any other lawful action. If a stockholder record date has not been fixed by the board of directors within the preceding four months, the determination shall be made as of the end of the corporation's most recent fiscal quarter. The residence of each stockholder is presumed to be the address appearing in the records of the corporation. Shares held of record by brokers or nominees shall be disregarded for purposes of calculating the percentages and numbers specified in this subsection. Any shares of a corporation allocated to the account of an employee or former employee, or beneficiary of an employee or former employee, of such corporation and held in a plan that is qualified under section 401(a) of the Internal Revenue Code of 1986, as amended, and is a defined contribution plan within the meaning of section 414(i) of said Code shall be deemed, for the purposes of clause (ii), to be held of record by the employee, former employee or beneficiary to whose account such shares are allocated.
In the case of a corporation which is an association or trust, references to ''articles of organization'' mean the instrument or declaration of trust; references to ''by-laws'' include publicly announced resolutions of the directors; references to ''directors'' mean the individuals performing similar functions; and references to the ''corporation'' or ''such corporation'' mean the association or trust.
(f) a stockholder becomes an interested stockholder inadvertently and (1) as soon as practicable divests sufficient shares so that the stockholder ceases to be an interested stockholder; and (2) would not, at any time within the three year period immediately prior to a business combination between the corporation and such stockholder, have been an interested stockholder but for the inadvertent acquisition; or
(g) the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which: (1) constitutes one of the transactions described in clause (ii) of paragraph (3); (2) is with or by a person who either was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of the corporation's board of directors; and (3) is approved or not opposed by a majority of the members of the board of directors then in office, but not less than one, who were directors prior to any person becoming an interested stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence shall be limited to:
(i) a merger or consolidation of the corporation, except for a merger in respect of which, pursuant to section 11.05 of chapter 156D, no vote of the stockholders of the corporation is required;
(ii) a sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, whether as part of a dissolution or otherwise, of assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation, other than to any direct or indirect wholly-owned subsidiary or to the corporation, having an aggregate market value equal to fifty percent or more of either that aggregate market value of all of the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation; or
(iii) a proposed tender or exchange offer for fifty percent or more of the outstanding voting stock of the corporation.
The corporation shall give not less than twenty days notice to all interested stockholders prior to the consummation of any of the transactions described in clause (i) or (ii) of paragraph (3) of subsection (g).
Notwithstanding the provisions of subsections (a), (b), (c) and (d), a corporation may elect by a provision of its original articles of organization or any amendment thereto to be governed by this chapter; provided, however, that any such amendment to the articles of organization shall not apply to restrict a business combination between the corporation and an interested stockholder of the corporation if the interested stockholder became such prior to the effective date of this chapter.