39: Corporate Acquisitions and Multinational Corporations Flashcards
section 14(a) of the securities exchange act of 1934
a section of a federal statute that gives the SEC the authority to regulate the solicitation of proxies
proxy statement
a document that fully describes (1) the matter for which a proxy is being solicited, (2) who is soliciting the proxy, and (3) any other pertinent information
antifraud provision
section 14(a) of the securities exchange act of 1934, which prohibits misrepresentations or omissions of a material fact in the proxy materials
proxy contest
a contest in which opposing factions of shareholders and managers solicit proxies from other shareholders; greatest votes wins
shareholder resolution / shareholder proposal
a resolution that a shareholder who meets certain ownership requirements may submit to other shareholders for a vote. many contain social issues
consolidation
the combination of two corporations in which a new corporation is created and the two merging corporations cease to exist
share exchange / stock-for-stock merger
a situation in which one corporation acquires all the shares of another corporation, and both corporations retain their separate legal existence
articles of merger
a document that must be filed with the secretary of state by the surviving corporation of a merger
articles of share exchange
a document that must be filed with the secretary of state by the surviving corporation of a share exchange
short-form merger
a merger between a parent corporation and a subsidiary corporation that does not require the approval of the shareholders of either corporation or the approval of the board of directors of the subsidiary corporation
dissenting shareholder appraisal rights
the rights of shareholders who object to a proposed merger, share exchange, or sale or lease of all or substantially all of the property of a corporation to have their shares valued by the court and receive cash payment of this value from the corporation
target corporation
a corporation that is proposed to be acquired in a tender offer situation
tender offer
an offer that an acquirer makes directly to a target corporation’s shareholders in an effort to acquire the target corporation
hostile tender offer
a tender offer that is made without the permission of the target company’s management
williams act
a federal act that amended the securities exchange act of 1934 that specifically regulates tender offers
fair price rule / bes price rule
a rule that says any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares
pro rata rule
a rule that say shares must be purchased on a pro rata basis if too many shares are tendered
section 13(d) of the securities exchange act of 1934
a section of a federal statute that requires any party that acquires 5 percent or more of an equity security of a company registered with the SEC to report the acquisition to the SEC and disclose its intentions regarding the situation
section 14(e) of the williams act
a section of the williams act that prohibits fraudulent, deceptive, and manipulative practices in connection with a tender offer
crown jewel
a valuable asset of a target corporation that the tender offeror particularly wants to acquire in a tender offer
poison pill
defensive strategies built into a corporation’s articles of incorporation, corporate bylaws, or the corporation’s contracts and leases that prevent the takeover of the corporation
white knight merger
a merger of a target company of a tender offer with a friendly party that usually leaves the target corporation and/or its management intact
reverse tender offer
a tender offer that is made by a target corporation to purchase the shares of the corporation that is making the tender offer on the target corporation
employee stock ownership plan (ESOP)
a plan that places a certain percentage of a corporation’s securities in the plan for distribution to employees of the corporation
flip-over rights plan
a defensive plan of a corporation that provides that existing shareholders of the corporation may convert their shares for a greater number (e.g., twice the value) of SHARES of an acquiring corporation once a specified percentage of its shares have been acquired by the acquiring corporation
flip-in rights plan
a defensive plan of a corporation that provides that existing shareholders of the corporation may convert their shares for a greater number (e.g., twice the value) of DEBT INSTRUMENTS of the corporation once a specified percentage of its shares have been acquired by the acquiring corporation
greenmail
the purchase by a target corporation of its stock from an actual or perceived tender offeror at a premium
standstill agreement
an agreement entered into by a target company with a tender offeror whereby the tender offeror who receives a payment of greenmail agrees to abandon its tender offer and not purchase any additional stock of the target company for an agreed-upon period of time
business judgment rule
a rule that protects the decisions of a board of directors of a corporation where the board has acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the corporation and its shareholders
antitakeover statute
a statute that is enacted by a state legislature that protects against the hostile takeover of corporations incorporated in or doing business in the state
exon-florio foreign investment provision
a federal law that mandates that the president of the united states suspend, prohibit, or dismantle the acquisition of a u.s. business by foreign investors if there is credible evidence that the foreign investor might take action that threatens to impair national security
foreign investment risk review modernization act (firrma)
a federal statute that prohibits foreign companies, persons, and enterprises owned by foreign governments or agencies from acquiring sensitively located real estate; non-controlling interest in u.s. business involved in critical technologies, critical infrastructure, or sensitive personal data of u.s. citizens; and joint ventures that involve the transfer of u.s.-origin technology
committee on foreign investment in the united states (cfius)
a federal interagency committee that has been delegated executive power to review and reject foreign acquisitions and investments that violate federal laws administered by the committee
international branch office
an office opened by a multinational corporation to conduct business in another country. a branch office is not a separate legal entity but meraly an office of the corporation
international subsidiary corporation
a corporation owned by a multinational corporation that conducts business in another country. this subsidiary corporation is a separate legal entity from the parent corporation
foreign corrupt practices act (FCPA)
a federal statute that makes it illegal for a u.s citizen or resident or u.s. companies or their officers, directors, agents, shareholders, employees, partners, or intermediaries to bribe a foreign official, or foreign political party official, a candidate for foreign political office, or an official of a public international organization, where the bribe is intended to influence the official’s act or decision such that the bribing party obtains or retains business or secures an improper advantage
united nations convention against corruption (UNCAC)
an international treaty that requires signatory countries to adopt anti-corruption laws, to cooperate in criminal matters and assist each other in investigating and prosecuting ciolators, and to return proceeds from corruption
