S 693 Session 112 (1997-1998)
S 0693 General Bill, By Reese
A BILL TO AMEND SECTION 33-1-400, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO DEFINITIONS IN THE SOUTH CAROLINA BUSINESS CORPORATION ACT OF
1988, SO AS TO ADD A DEFINITION FOR "PUBLIC CORPORATION"; TO AMEND SECTION
33-6-240, RELATING TO THE CREATION OF SHARE OPTIONS AND RIGHTS, SO AS TO ALLOW
THOSE RIGHTS TO BE RESTRICTED OR CONDITIONAL IN THE CASE OF A PUBLIC
CORPORATION; TO AMEND SECTION 33-7-102, RELATING TO SPECIAL MEETINGS OF
SHAREHOLDERS, SO AS TO ALLOW SHAREHOLDERS OF A PUBLIC CORPORATION TO CALL A
SPECIAL MEETING ONLY IF AUTHORIZED IN THE ARTICLES OF INCORPORATION; TO AMEND
SECTION 33-7-200, RELATING TO COMPILATION AND INSPECTION OF SHAREHOLDERS'
LISTS, SO AS TO INCREASE THE TIME FOR COMPILING AND MAKING THE LIST AVAILABLE
FOR INSPECTION TO SHAREHOLDERS OF A PUBLIC CORPORATION; TO AMEND SECTION
33-8-103, RELATING TO ELECTION OF A BOARD OF DIRECTORS, SO AS TO ELIMINATE THE
CAP ON THE ABILITY OF A BOARD OF A PUBLIC CORPORATION TO CHANGE ITS SIZE; TO
AMEND SECTION 33-10-103, RELATING TO PROPOSAL AND APPROVAL OF AMENDMENTS TO
THE ARTICLES OF INCORPORATION, SO AS TO ELIMINATE THE RIGHT OF SHAREHOLDER
APPROVAL IN THE CASE OF A PUBLIC CORPORATION; TO AMEND SECTION 33-11-104,
RELATING TO MERGER OF SUBSIDIARY AND PARENT CORPORATION, SO AS TO ELIMINATE
THE WAITING PERIOD FOR PUBLIC CORPORATIONS; TO AMEND SECTION 33-12-101,
RELATING TO MORTGAGE AND SALE OF CORPORATE ASSETS, SO AS TO ALLOW THE TRANSFER
OF PROPERTY OF A PUBLIC CORPORATION TO A CORPORATION IT OWNS; AND TO AMEND
SECTION 33-13-102, RELATING TO SHAREHOLDERS' RIGHT TO DISSENT AND OBTAIN
PAYMENT FOR SHARES, SO AS TO HAVE STOCK IN A PUBLIC CORPORATION VALUED BY THE
STOCK EXCHANGE.
04/24/97 Senate Introduced and read first time SJ-4
04/24/97 Senate Referred to Committee on Judiciary SJ-4
A BILL
TO AMEND SECTION 33-1-400, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO DEFINITIONS IN THE
SOUTH CAROLINA BUSINESS CORPORATION ACT OF 1988,
SO AS TO ADD A DEFINITION FOR "PUBLIC
CORPORATION"; TO AMEND SECTION 33-6-240, RELATING
TO THE CREATION OF SHARE OPTIONS AND RIGHTS, SO AS
TO ALLOW THOSE RIGHTS TO BE RESTRICTED OR
CONDITIONAL IN THE CASE OF A PUBLIC CORPORATION;
TO AMEND SECTION 33-7-102, RELATING TO SPECIAL
MEETINGS OF SHAREHOLDERS, SO AS TO ALLOW
SHAREHOLDERS OF A PUBLIC CORPORATION TO CALL A
SPECIAL MEETING ONLY IF AUTHORIZED IN THE
ARTICLES OF INCORPORATION; TO AMEND SECTION
33-7-200, RELATING TO COMPILATION AND INSPECTION OF
SHAREHOLDERS' LISTS, SO AS TO INCREASE THE TIME
FOR COMPILING AND MAKING THE LIST AVAILABLE FOR
INSPECTION TO SHAREHOLDERS OF A PUBLIC
CORPORATION; TO AMEND SECTION 33-8-103, RELATING
TO ELECTION OF A BOARD OF DIRECTORS, SO AS TO
ELIMINATE THE CAP ON THE ABILITY OF A BOARD OF A
PUBLIC CORPORATION TO CHANGE ITS SIZE; TO AMEND
SECTION 33-10-103, RELATING TO PROPOSAL AND
APPROVAL OF AMENDMENTS TO THE ARTICLES OF
INCORPORATION, SO AS TO ELIMINATE THE RIGHT OF
SHAREHOLDER APPROVAL IN THE CASE OF A PUBLIC
CORPORATION; TO AMEND SECTION 33-11-104, RELATING
TO MERGER OF SUBSIDIARY AND PARENT CORPORATION,
SO AS TO ELIMINATE THE WAITING PERIOD FOR PUBLIC
CORPORATIONS; TO AMEND SECTION 33-12-101, RELATING
TO MORTGAGE AND SALE OF CORPORATE ASSETS, SO AS
TO ALLOW THE TRANSFER OF PROPERTY OF A PUBLIC
CORPORATION TO A CORPORATION IT OWNS; AND TO
AMEND SECTION 33-13-102, RELATING TO
SHAREHOLDERS' RIGHT TO DISSENT AND OBTAIN
PAYMENT FOR SHARES, SO AS TO HAVE STOCK IN A
PUBLIC CORPORATION VALUED BY THE STOCK
EXCHANGE.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 33-1-400 of the 1976 Code is amended by
adding:
"(28) 'Public corporation' means a corporation either registered
with a federal agency pursuant to Section 12 of the Securities
Exchange Act of 1934 or a successor, having gross assets at the end
of its most recent fiscal year of twenty-five million dollars or more,
or having outstanding a class of stock held of record by five hundred
or more shareholders."
SECTION 2. Section 33-6-240 of the 1976 Code is amended to
read:
"Section 33-6-240. (A) A corporation may issue rights,
options, or warrants for the purchase of shares of the corporation.
The board of directors shall determine the terms upon which the
rights, options, or warrants are issued, their form and content, and the
consideration for which the shares are to be issued.
(B) In the case of a public corporation, the terms and
conditions of the rights, options, or warrants may include, without
limitation, restrictions or conditions that preclude or limit the
exercise, transfer, or receipt of the rights, options, or warrants by the
holder or holders or beneficial owner or owners of a specified number
or percentage of the outstanding voting shares of the public
corporation or by a transferee of that holder or owner, or that
invalidate or void such rights, options, or warrants held by a holder
or owner or a transferee. Determinations by the board of directors
whether to impose, enforce, waive, or otherwise render ineffective
the restrictions or conditions may be judicially reviewed in an
appropriate proceeding."
SECTION 3. Section 33-7-102(a)(2) of the 1976 Code is amended
to read:
"(2) in the case of a corporation which is not a public
corporation, or of a public corporation which elects in its articles of
incorporation, if the holders of at least ten percent of all the
votes entitled to be cast on any issue proposed to be considered at the
proposed special meeting sign, date, and deliver to the corporation's
secretary one or more written demands for the meeting describing the
purpose for which it is to be held."
SECTION 4. Section 33-7-200(b) of the 1976 Code is amended to
read:
"(b) The shareholders' list must be available for inspection by any
shareholder, beginning, in the case of a corporation which is not
a public corporation, on the date on which notice of the meeting
is given for which the list was prepared and in the case of a
public corporation, no later than the fifth business day following the
date on which notice was given, in either case continuing
through the meeting, at the corporation's principal office or at a place
identified in the meeting notice in the city where the meeting is to be
held. A shareholder, his agent, or attorney is entitled on written
demand to inspect and, subject to the requirements of Section
33-16-102(c), to copy the list, during regular business hours and at
his expense, during the period it is available for inspection."
SECTION 5. Section 33-8-103(b) of the 1976 Code is amended to
read:
"(b) Except in the case of a public corporation, if a board
of directors has power under the articles of incorporation or under a
bylaw provision to fix or change the number of directors, the board
may increase or decrease by thirty percent or less the number of
directors last approved by the shareholders, but only the shareholders
may increase or decrease by more than thirty percent the number of
directors last approved by the shareholders."
SECTION 6. Section 33-10-103(d) of the 1976 Code is amended
to read:
"(d) In the case of a corporation which is not a public
corporation, if the holders of at least ten percent of any class of
voting shares of the corporation propose amendments to the articles
of incorporation, the board of directors shall submit the proposed
amendments to the shareholders at the next possible special or annual
meeting."
SECTION 7. Section 33-11-104(d) of the 1976 Code is amended
to read:
"(d) In the case of a corporation which is not a public
corporation, the parent may not deliver articles of merger to the
Secretary of State for filing until at least thirty days after the date it
mailed a copy of the plan of merger to each shareholder of the
subsidiary who did not waive the mailing requirement."
SECTION 8. Section 33-12-101(a) of the 1976 Code is amended
by adding an item at the end to read:
"(3) a public corporation, on the terms and conditions and for the
consideration determined by the board of directors, may transfer
some or all of its property to a corporation of which the public
corporation owns all the shares."
SECTION 9. Section 33-13-102 of the 1976 Code is amended to
read:
"Section 33-13-102. (A) A shareholder is entitled to
dissent from, and obtain payment of the fair value of, his shares in
the event of if any of the following corporate actions
occur:
(1) consummation of a plan of merger to which the corporation
is a party:
(i) if shareholder approval is required for the merger by
Section 33-11-103 or the articles of incorporation and the shareholder
is entitled to vote on the merger; or
(ii) if the corporation is a subsidiary that is merged with its
parent under Section 33-11-104 or 33-11-108; or
(iii) if the corporation is a parent that is merged with
its subsidiary under Section 33-11-108;
(2) consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares are to be
acquired, if the shareholder is entitled to vote on the plan;
(3) consummation of a sale or exchange of all, or substantially
all, of the property of the corporation other than in the usual and
regular course of business, if the shareholder is entitled to vote on the
sale or exchange, including a sale in dissolution, but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by
which all or substantially all of the net proceeds of the sale must be
distributed to the shareholders within one year after the date of sale;
(4) an amendment of the articles of incorporation that materially
and adversely affects rights in respect of a dissenter's shares because
it:
(i) alters or abolishes a preferential right of the shares;
(ii) creates, alters, or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for the
redemption or repurchase, of the shares;
(iii) alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(iv) excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
(v) reduces the number of shares owned by the shareholder
to a fraction of a share if the fractional share so created is to be
acquired for cash under Section 33-6-104; or
(5) in the case of a corporation which is not a public
corporation, the approval of a control share acquisition under
Article 1 of Chapter 2 of Title 35;
(6) any corporate action to the extent the articles of
incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent
and obtain payment for their shares.
(B) Appraisal rights pursuant to this section are not available
for shares of a class or series of stock which, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote
at the meeting of stockholders to act upon the agreement of merger
or consolidation, were listed on a national securities exchange."
SECTION 10. This act takes effect upon approval by the Governor.
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