2023 New York Laws › BSC - Business Corporation › Article 9 - Merger or Consolidation; Guarantee; Disposition of Assets; Share Exchanges › 912 - Requirements Relating to Certain Business Combinations.

§ 912. Requirements relating to certain business combinations.
(a) For the purposes of this section:
(1)  "Affiliate"  means  a person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or  is  under
common control with, a specified person.
(2)  "Announcement  date",  when  used  in  reference  to any business
combination, means the date of the  first  public  announcement  of  the
final, definitive proposal for such business combination.
(3) "Associate", when used to indicate a relationship with any person,
means  (A)  any  corporation  or organization of which such person is an
officer or partner or is, directly or indirectly, the  beneficial  owner
of  ten  percent  or more of any class of voting stock, (B) any trust or
other estate in which such person has a substantial beneficial  interest
or  as  to which such person serves as trustee or in a similar fiduciary
capacity, and (C) any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person.
(4) "Beneficial owner", when used with respect to any stock,  means  a
person:
(A)  that,  individually  or  with or through any of its affiliates or
associates, beneficially owns such stock, directly or indirectly; or
(B) that, individually or with or through any  of  its  affiliates  or
associates,  has (i) the right to acquire such stock (whether such right
is exercisable immediately or only after the passage of time),  pursuant
to  any  agreement,  arrangement  or  understanding  (whether  or not in
writing), or upon the exercise of conversion  rights,  exchange  rights,
warrants  or  options,  or  otherwise;  provided, however, that a person
shall not be deemed the beneficial owner of stock tendered pursuant to a
tender or exchange offer made by such person or  any  of  such  person's
affiliates  or  associates  until  such  tendered  stock is accepted for
purchase or exchange; or (ii) the right to vote such stock  pursuant  to
any agreement, arrangement or understanding (whether or not in writing);
provided,  however,  that  a  person  shall not be deemed the beneficial
owner of any stock under this item  if  the  agreement,  arrangement  or
understanding  to  vote  such  stock  (X) arises solely from a revocable
proxy or consent given in response to a proxy  or  consent  solicitation
made  in  accordance with the applicable rules and regulations under the
Exchange Act and (Y) is not then reportable on a Schedule 13D under  the
Exchange Act (or any comparable or successor report); or
(C)  that  has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding,  voting  (except
voting  pursuant  to  a  revocable proxy or consent as described in item
(ii) of clause (B) of this subparagraph), or  disposing  of  such  stock
with  any  other  person  that beneficially owns, or whose affiliates or
associates beneficially own, directly or indirectly, such stock.
(5) "Business combination", when used in  reference  to  any  domestic
corporation and any interested shareholder of such corporation, means:
(A)  any merger or consolidation of such corporation or any subsidiary
of such corporation with (i) such interested  shareholder  or  (ii)  any
other  corporation  (whether  or not itself an interested shareholder of
such corporation) which is, or after such merger or consolidation  would
be, an affiliate or associate of such interested shareholder;
(B)  any  sale,  lease,  exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or  with
such  interested  shareholder  or  any  affiliate  or  associate of such
interested shareholder of assets of such corporation or  any  subsidiary
of  such  corporation  (i) 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 such corporation, (ii) having an

aggregate market value equal to ten percent or  more  of  the  aggregate
market  value of all the outstanding stock of such corporation, or (iii)
representing ten percent or more of the  earning  power  or  net  income
determined on a consolidated basis, of such corporation;
(C)  the issuance or transfer by such corporation or any subsidiary of
such corporation (in one transaction or a series of transactions) of any
stock of such corporation or any subsidiary of  such  corporation  which
has  an  aggregate  market  value  equal  to five percent or more of the
aggregate market value of all the outstanding stock of such  corporation
to  such  interested  shareholder  or any affiliate or associate of such
interested shareholder except pursuant to the exercise  of  warrants  or
rights  to purchase stock offered, or a dividend or distribution paid or
made, pro rata to all shareholders of such corporation;
(D) the adoption of any  plan  or  proposal  for  the  liquidation  or
dissolution  of  such  corporation  proposed  by,  or  pursuant  to  any
agreement, arrangement or understanding  (whether  or  not  in  writing)
with,  such interested shareholder or any affiliate or associate of such
interested shareholder;
(E) any reclassification of securities (including, without limitation,
any stock split, stock dividend,  or  other  distribution  of  stock  in
respect  of  stock,  or any reverse stock split), or recapitalization of
such corporation, or any merger or  consolidation  of  such  corporation
with  any  subsidiary  of  such  corporation,  or  any other transaction
(whether or not with or into  or  otherwise  involving  such  interested
shareholder),  proposed by, or pursuant to any agreement, arrangement or
understanding  (whether  or  not  in  writing)  with,  such   interested
shareholder   or   any   affiliate   or  associate  of  such  interested
shareholder, which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class or series
of voting stock or securities convertible  into  voting  stock  of  such
corporation  or  any subsidiary of such corporation which is directly or
indirectly owned by such interested  shareholder  or  any  affiliate  or
associate  of  such  interested  shareholder,  except  as  a  result  of
immaterial changes due to fractional share adjustments; or
(F) any receipt by such interested shareholder  or  any  affiliate  or
associate  of  such  interested  shareholder of the benefit, directly or
indirectly (except proportionately as a shareholder of such corporation)
of  any  loans,  advances,  guarantees,  pledges  or   other   financial
assistance  or  any  tax  credits or other tax advantages provided by or
through such corporation.
(6) "Common stock" means any stock other than preferred stock.
(7) "Consummation date", with respect  to  any  business  combination,
means  the date of consummation of such business combination, or, in the
case of a business combination as to which a shareholder vote is  taken,
the  later of the business day prior to the vote or twenty days prior to
the date of consummation of such business combination.
(8) "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 stock, by contract, or otherwise. A person's beneficial ownership
of ten percent or more of a corporation's outstanding voting stock shall
create a presumption that such person has control of  such  corporation.
Notwithstanding  the  foregoing,  a  person  shall not be deemed to have
control of a corporation if such person  holds  voting  stock,  in  good
faith  and  not for the the purpose of circumventing this section, 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
such corporation.
(9)  "Exchange  Act" means the Act of Congress known as the Securities
Exchange Act of 1934, as the same has been or hereafter may  be  amended
from time to time.
(10)  "Interested shareholder", when used in reference to any domestic
corporation, means any  person  (other  than  such  corporation  or  any
subsidiary of such corporation) that
(A)  (i)  is  the  beneficial owner, directly or indirectly, of twenty
percent or more of the outstanding voting stock of such corporation; or
(ii) is an affiliate or associate of such corporation and at any  time
within  the  five-year  period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of twenty  percent  or
more  of the then outstanding voting stock of such corporation; provided
that
(B) for the purpose of determining whether a person is  an  interested
shareholder,  the  number  of shares of voting stock of such corporation
deemed to be outstanding shall include shares deemed to be  beneficially
owned  by  the  person  through application of subparagraph four of this
paragraph but shall not include any  other  unissued  shares  of  voting
stock  of  such  corporation  which  may  be  issuable  pursuant  to any
agreement, arrangement or understanding, or upon exercise of  conversion
rights, warrants or options, or otherwise.
(11)  "Market  value",  when used in reference to stock or property of
any domestic corporation, means:
(A) in the case of stock, the highest closing sale  price  during  the
thirty-day  period immediately preceding the date in question of a share
of such stock on the composite tape for New York  stock  exchange-listed
stocks,  or,  if  such  stock is not quoted on such composite tape or if
such stock is not listed on  such  exchange,  on  the  principal  United
States  securities  exchange  registered under the Exchange Act on which
such stock is listed, or, if such  stock  is  not  listed  on  any  such
exchange,  the  highest closing bid quotation with respect to a share of
such stock during the thirty-day period preceding the date  in  question
on  the  National  Association  of  Securities Dealers, Inc.   Automated
Quotations System or any system then in use, or if  no  such  quotations
are  available, the fair market value on the date in question of a share
of  such  stock  as  determined  by  the  board  of  directors  of  such
corporation in good faith; and
(B)  in the case of property other than cash or stock, the fair market
value of such property on the date in  question  as  determined  by  the
board of directors of such corporation in good faith.
(12)  "Preferred  stock"  means  any  class  or  series  of stock of a
domestic  corporation  which  under  the  by-laws  or   certificate   of
incorporation  of  such  corporation  is  entitled to receive payment of
dividends prior to any payment of  dividends  on  some  other  class  or
series  of  stock,  or  is  entitled  in  the  event  of  any  voluntary
liquidation, dissolution or winding up of  the  corporation  to  receive
payment  or distribution of a preferential amount before any payments or
distributions are received by some other class or series of stock.
(14) "Stock" means:
(A) any stock or similar security, any certificate  of  interest,  any
participation   in  any  profit  sharing  agreement,  any  voting  trust
certificate, or any certificate of deposit for stock; and
(B) any security convertible,  with  or  without  consideration,  into
stock, or any warrant, call or other option or privilege of buying stock
without  being  bound to do so, or any other security carrying any right
to acquire, subscribe to or purchase stock.
(15) "Stock acquisition date", with respect  to  any  person  and  any
domestic  corporation,  means the date that such person first becomes an
interested shareholder of such corporation.
(16) "Subsidiary" of any person means any other corporation of which a
majority  of  the voting stock is owned, directly or indirectly, by such
person.
(17) "Voting stock" means shares of capital  stock  of  a  corporation
entitled to vote generally in the election of directors.
(b) Notwithstanding anything to the contrary contained in this chapter
(except  the  provisions  of paragraph (d) of this section), no domestic
corporation shall engage in any business combination with any interested
shareholder of such corporation for a period  of  five  years  following
such   interested  shareholder's  stock  acquisition  date  unless  such
business combination or the purchase of stock made  by  such  interested
shareholder  on  such interested shareholder's stock acquisition date is
approved by the board of directors of such  corporation  prior  to  such
interested  shareholder's  stock  acquisition  date.  If  a  good  faith
proposal  is  made  in  writing  to  the  board  of  directors  of  such
corporation  regarding  a  business  combination, the board of directors
shall respond, in writing, within thirty days or such shorter period, if
any, as may be required by the Exchange Act, setting forth  its  reasons
for  its  decision  regarding such proposal. If a good faith proposal to
purchase stock is made in writing to the  board  of  directors  of  such
corporation, the board of directors, unless it responds affirmatively in
writing  within  thirty  days  or such shorter period, if any, as may be
required by the Exchange Act, shall be deemed to have  disapproved  such
stock purchase.
(c) Notwithstanding anything to the contrary contained in this chapter
(except  the  provisions  of paragraphs (b) and (d) of this section), no
domestic  corporation  shall  engage  at  any  time  in   any   business
combination  with  any  interested shareholder of such corporation other
than a business combination specified in any one  of  subparagraph  (1),
(2) or (3):
(1)  A business combination approved by the board of directors of such
corporation prior to such  interested  shareholder's  stock  acquisition
date, or where the purchase of stock made by such interested shareholder
on  such  interested  shareholder's  stock  acquisition  date  had  been
approved by the board of directors of such  corporation  prior  to  such
interested shareholder's stock acquisition date.
(2)  A  business  combination  approved by the affirmative vote of the
holders of a majority of the outstanding voting stock  not  beneficially
owned  by  such  interested shareholder or any affiliate or associate of
such interested shareholder at a meeting  called  for  such  purpose  no
earlier  than  five  years  after  such  interested  shareholder's stock
acquisition date.
(3) A business combination that meets all of the following conditions:
(A) 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  common  stock  of  such
corporation in such business combination is at least equal to the higher
of the following:
(i) the highest per share price paid by such interested shareholder at
a time when he was the beneficial owner, directly or indirectly, of five
percent or more of the outstanding voting stock of such corporation, for
any  shares  of  common stock of the same class or series acquired by it
(X) within the five-year period immediately prior  to  the  announcement
date  with  respect  to  such  business  combination,  or (Y) within the
five-year period immediately prior to, or in, the transaction  in  which

such  interested shareholder became an interested shareholder, whichever
is higher; plus, in either case, interest compounded annually  from  the
earliest date on which such 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 common stock since such earliest
date, up to the amount of such interest; and
(ii) the market value per share of common stock  on  the  announcement
date  with  respect  to  such business combination or on such interested
shareholder's stock acquisition date, whichever is higher; plus interest
compounded annually from such 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
common stock since such date, up to the amount of such interest.
(B)  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 stock,
other than common stock, of such corporation is at least  equal  to  the
highest of the following (whether or not such interested shareholder has
previously acquired any shares of such class or series of stock):
(i) the highest per share price paid by such interested shareholder at
a time when he was the beneficial owner, directly or indirectly, of five
percent or more of the outstanding voting stock of such corporation, for
any  shares  of  such class or series of stock acquired by it (X) within
the five-year period immediately prior to  the  announcement  date  with
respect to such business combination, or (Y) within the five-year period
immediately  prior  to,  or in, the transaction in which such interested
shareholder became an interested shareholder, whichever is higher; plus,
in either case, interest compounded annually from the earliest  date  on
which  such  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 such class or series of stock since
such earliest date, up to the amount of such interest;
(ii) the highest preferential amount per share to which the holders of
shares of such class or series of stock are entitled in the event of any
voluntary liquidation, dissolution or winding up  of  such  corporation,
plus  the  aggregate amount of any dividends declared or due as to which
such holders are entitled prior to payment of dividends  on  some  other
class  or series of stock (unless the aggregate amount of such dividends
is included in such preferential amount); and
(iii) the market value per share of such class or series of  stock  on
the  announcement  date  with respect to such business combination or on
such interested  shareholder's  stock  acquisition  date,  whichever  is
higher;  plus  interest  compounded  annually from such 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 such class or series of stock since
such date, up to the amount of such interest.
(C) The consideration to be received by holders of a particular  class
or  series  of  outstanding  stock  (including  common  stock)  of  such
corporation in such business combination is in cash or in the same  form
as  the interested shareholder has used to acquire the largest number of

shares of such class or series of stock previously acquired by  it,  and
such consideration shall be distributed promptly.
(D) The holders of all outstanding shares of stock of such corporation
not  beneficially owned by such interested shareholder immediately prior
to the consummation of such business combination are entitled to receive
in such business combination cash or other consideration for such shares
in compliance with clauses (A), (B) and (C) of this subparagraph.
(E) After such interested shareholder's  stock  acquisition  date  and
prior   to   the   consummation  date  with  respect  to  such  business
combination, such interested shareholder has not become  the  beneficial
owner  of  any  additional  shares  of  voting stock of such corporation
except:
(i) as part of the  transaction  which  resulted  in  such  interested
shareholder becoming an interested shareholder;
(ii) by virtue of proportionate stock splits, stock dividends or other
distributions  of  stock in respect of stock not constituting a business
combination under clause (E) of subparagraph five of  paragraph  (a)  of
this section;
(iii)  through a business combination meeting all of the conditions of
paragraph (b) of this section and this paragraph; or
(iv) through purchase by such  interested  shareholder  at  any  price
which,  if such price had been paid in an otherwise permissible business
combination the announcement date and consummation date  of  which  were
the  date  of  such  purchase,  would have satisfied the requirements of
clauses (A), (B) and (C) of this subparagraph.
(d) The provisions of this section shall not apply:
(1) to any business combination of a domestic  corporation  that  does
not  have  a  class  of  voting stock registered with the Securities and
Exchange Commission pursuant to section  twelve  of  the  Exchange  Act,
unless the certificate of incorporation provides otherwise; or
(2)  to  any  business  combination  of  a  domestic corporation whose
certificate of incorporation has  been  amended  to  provide  that  such
corporation  shall  be  subject to the provisions of this section, which
did not have a class of voting stock registered with the Securities  and
Exchange  Commission  pursuant  to section twelve of the Exchange Act on
the  effective  date  of  such  amendment,  and  which  is  a   business
combination  with an interested shareholder whose stock acquisition date
is prior to the effective date of such amendment; or
(3) to any business combination of  a  domestic  corporation  (i)  the
original  certificate  of  incorporation  of  which contains a provision
expressly electing not to be governed by this  section,  or  (ii)  which
adopts  an  amendment  to  such  corporation's  by-laws  prior  to March
thirty-first, nineteen hundred eighty-six, expressly electing not to  be
governed  by  this  section,  or (iii) which adopts an amendment to such
corporation's by-laws, approved by the affirmative vote of a majority of
votes of the outstanding voting stock of such corporation, excluding the
voting  stock  of  interested  shareholders  and  their  affiliates  and
associates,  expressly  electing  not  to  be  governed by this section,
provided that such amendment to the by-laws shall not be effective until
eighteen months after such vote of such corporation's  shareholders  and
shall  not apply to any business combination of such corporation with an
interested shareholder whose stock acquisition date is on  or  prior  to
the effective date of such amendment; or
(4)  to  any  business  combination  of a domestic corporation with an
interested shareholder of such corporation which  became  an  interested
shareholder inadvertently, if such interested shareholder (i) as soon as
practicable,  divests  itself of a sufficient amount of the voting stock
of such corporation so that  it  no  longer  is  the  beneficial  owner,

directly  or  indirectly,  of  twenty percent or more of the outstanding
voting stock of such corporation, and (ii) would not at any time  within
the  five-year  period  preceding  the announcement date with respect to
such  business  combination  have been an interested shareholder but for
such inadvertent acquisition; or
(5) to any business combination with an interested shareholder who was
the beneficial owner, directly or indirectly, of five percent or more of
the outstanding voting stock of such corporation on  October  thirtieth,
nineteen  hundred  eighty-five,  and  remained  so  to  such  interested
shareholder's stock acquisition date.