Fundamental Changes to Corporation

Question 1

Types of Changes Considered Fundamental

Answer 1

1. Amendments to articles,
2. mergers and consolidations (unless parent subsidiary merger or where rights of surviving shareholders not significantly effected)
3. share exchanges,
4. dispositions of substantially all assets

Question 2

Procedure for Approving Fundamental Changes

Answer 2

1. Board Resolution
2. Notice to Shareholders
3. Shareholder Approval
4. Articles of the Change filed with the stated

Question 3

Dissenters to Fundamental Changes

Answer 3

Can force corporation to purchase their share for a fair price if:
1. Give corporation notice of intent to demand appraisal rights before vote is taken
2. Do not vote in favor the change
3. Demand payment after the change is approved

Question 4

Tender Offers

Answer 4

Definition: Widespread public offering to purchase a substantial % of target’s shares regulated by the Williams Act

Regulations:
-offer must be open for at least 20 days and open to all members of the class of securities sought
-shareholders must be permitted to withdraw tendered shares will offer remains open
-if over prescritption, bidder must purchase on a pro rata basis among the shares deposited during first 10 days
-If offer price increased, higher price must be paid to all tendering shareholders
-management of target must give shareholders a recommendation

Question 5

Control Share Acquisition Statutes

Answer 5

if a certain stock ownership threshold is crossed, the shares purchased will not have voting rights unless granted by the majority of disinterested shares