H*3917 Session 112 (1997-1998)
H*3917(Rat #0451, Act #0328 of 1998) General Bill, By Klauber
A BILL TO AMEND SECTION 33-6-240, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO THE "SOUTH CAROLINA BUSINESS CORPORATIONS ACT OF 1988" AND SHARE
OPTIONS, SO AS TO PROVIDE THAT, IN THE CASE OF A PUBLIC CORPORATION, THE TERMS
AND CONDITIONS OF RIGHTS, OPTIONS, OR WARRANTS MAY INCLUDE 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 ANY TRANSFEREE OR ANY SUCH HOLDER OR OWNER, OR
THAT INVALIDATE OR VOID THE RIGHTS, OPTIONS, OR WARRANTS HELD BY THE HOLDER OR
OWNER OR BY THE TRANSFEREE; TO AMEND SECTION 33-7-102, RELATING TO THE "SOUTH
CAROLINA BUSINESS CORPORATIONS ACT OF 1988", SHAREHOLDERS, AND SPECIAL
MEETINGS, SO AS TO PROVIDE FOR THE CASE OF A CORPORATION WHICH IS NOT A PUBLIC
CORPORATION OR OF A PUBLIC CORPORATION MAKING ELECTION IN ITS ARTICLES OF
INCORPORATION; TO AMEND SECTION 33-7-200, RELATING TO THE "SOUTH CAROLINA
BUSINESS CORPORATIONS ACT OF 1988", VOTING, AND SHAREHOLDERS' LIST FOR
MEETING, SO AS TO PROVIDE THAT THE SHAREHOLDERS' LIST MUST BE AVAILABLE FOR
INSPECTION BY ANY SHAREHOLDER, BEGINNING IN THE CASE OF CORPORATION WHICH ARE
NOT PUBLIC CORPORATIONS, ON THE DATE ON WHICH NOTICE OF THE MEETING IS GIVEN
FOR WHICH THE LIST WAS PREPARED AND, IN THE CASE OF PUBLIC CORPORATIONS, NOT
LATER THAN THE FIFTH BUSINESS DAY FOLLOWING SUCH DATE, IN EITHER CASE,
CONTINUING THROUGH THE MEETING.-AMENDED SHORT TITLE
04/10/97 House Introduced and read first time HJ-70
04/10/97 House Referred to Committee on Judiciary HJ-71
05/08/97 House Committee report: Favorable with amendment
Judiciary HJ-2
05/14/97 House Debate adjourned until Tuesday, May 20, 1997 HJ-23
05/20/97 House Amended HJ-21
05/20/97 House Read second time HJ-25
05/21/97 House Read third time and sent to Senate HJ-15
05/21/97 Senate Introduced and read first time SJ-11
05/21/97 Senate Referred to Committee on Judiciary SJ-11
06/02/98 Senate Recalled from Committee on Judiciary SJ-16
06/02/98 Senate Read second time SJ-16
06/03/98 Senate Read third time and enrolled
06/04/98 Ratified R 451
06/09/98 Signed By Governor
06/09/98 Effective date 06/09/98
06/18/98 Copies available
06/18/98 Act No. 328
(A328, R451, H3917)
AN ACT TO AMEND SECTION 33-6-240, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA
BUSINESS CORPORATIONS ACT OF 1988 AND SHARE OPTIONS,
SO AS TO PROVIDE THAT, IN THE CASE OF A PUBLIC
CORPORATION, THE TERMS AND CONDITIONS OF RIGHTS,
OPTIONS, OR WARRANTS MAY INCLUDE 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 ANY TRANSFEREE OR ANY
SUCH HOLDER OR OWNER, OR THAT INVALIDATE OR VOID
THE RIGHTS, OPTIONS, OR WARRANTS HELD BY THE HOLDER
OR OWNER OR BY THE TRANSFEREE; TO AMEND SECTION
33-7-102, RELATING TO THE "SOUTH CAROLINA BUSINESS
CORPORATIONS ACT OF 1988", SHAREHOLDERS, AND SPECIAL
MEETINGS, SO AS TO PROVIDE FOR THE CASE OF A
CORPORATION WHICH IS NOT A PUBLIC CORPORATION OR OF
A PUBLIC CORPORATION MAKING ELECTION IN ITS ARTICLES
OF INCORPORATION; TO AMEND SECTION 33-7-200, RELATING
TO THE "SOUTH CAROLINA BUSINESS CORPORATIONS ACT OF
1988", VOTING, AND SHAREHOLDERS' LIST FOR MEETING, SO
AS TO PROVIDE THAT THE SHAREHOLDERS' LIST MUST BE
AVAILABLE FOR INSPECTION BY ANY SHAREHOLDER,
BEGINNING IN THE CASE OF CORPORATIONS WHICH ARE NOT
PUBLIC CORPORATIONS, ON THE DATE ON WHICH NOTICE OF
THE MEETING IS GIVEN FOR WHICH THE LIST WAS PREPARED
AND, IN THE CASE OF PUBLIC CORPORATIONS, NOT LATER
THAN THE FIFTH BUSINESS DAY FOLLOWING SUCH DATE, IN
EITHER CASE, CONTINUING THROUGH THE MEETING; TO
AMEND SECTION 33-8-103, RELATING TO THE "SOUTH
CAROLINA BUSINESS CORPORATIONS ACT OF 1988" AND THE
NUMBER AND ELECTION OF DIRECTORS, SO AS TO APPLY
CERTAIN PROVISIONS TO A CORPORATION WHICH IS NOT A
PUBLIC CORPORATION; TO AMEND SECTION 33-10-103,
RELATING TO THE "SOUTH CAROLINA BUSINESS
CORPORATIONS ACT OF 1988" AND AMENDMENT OF ARTICLES
OF INCORPORATION AND BYLAWS BY THE BOARD OF
DIRECTORS AND THE SHAREHOLDERS, SO AS TO APPLY
CERTAIN PROVISIONS TO A CORPORATION WHICH IS NOT A
PUBLIC CORPORATION; TO AMEND SECTION 33-11-104,
RELATING TO THE "SOUTH CAROLINA BUSINESS
CORPORATIONS ACT OF 1988" AND THE MERGER OF A
SUBSIDIARY, SO AS TO APPLY CERTAIN PROVISIONS TO A
CORPORATION WHICH IS NOT A PUBLIC CORPORATION; TO
AMEND SECTION 33-12-101, RELATING TO THE "SOUTH
CAROLINA BUSINESS CORPORATIONS ACT OF 1988", THE SALE
OF ASSETS IN THE REGULAR COURSE OF BUSINESS, AND THE
MORTGAGE OF ASSETS, SO AS TO, AMONG OTHER THINGS,
PROVIDE THAT A PUBLIC CORPORATION, ON THE TERMS AND
CONDITIONS AND FOR THE CONSIDERATION DETERMINED BY
THE BOARD OF DIRECTORS, MAY TRANSFER ANY OR ALL OF
ITS PROPERTY TO A CORPORATION, ALL THE SHARES OF
WHICH ARE OWNED BY THE PUBLIC CORPORATION; TO
AMEND SECTION 33-13-102, RELATING TO THE "SOUTH
CAROLINA BUSINESS CORPORATIONS ACT OF 1988",
DISSENTERS' RIGHTS, AND THE RIGHT TO DISSENT, SO AS TO
PROVIDE THAT A SHAREHOLDER IS ENTITLED TO DISSENT
FROM, AND OBTAIN PAYMENT OF THE FAIR VALUE OF, HIS
SHARES, UPON THE APPROVAL OF A CONTROL SHARE
ACQUISITION, IN THE CASE OF A CORPORATION WHICH IS
NOT A PUBLIC CORPORATION, AND TO PROVIDE THAT NO
DISSENTERS' RIGHTS ARE AVAILABLE FOR SHARES OF ANY
CLASS OR SERIES OF SHARES WHICH, AT THE RECORD DATE
FIXED TO DETERMINE SHAREHOLDERS ENTITLED TO RECEIVE
NOTICE OF A VOTE AT THE MEETING OF SHAREHOLDERS TO
ACT UPON THE AGREEMENT OF MERGER OR EXCHANGE,
WERE EITHER LISTED ON A NATIONAL SECURITIES
EXCHANGE OR DESIGNATED AS A NATIONAL MARKET
SYSTEM SECURITY ON AN INTERDEALER QUOTATION
SYSTEM BY THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC.; AND TO AMEND SECTION 33-1-400, RELATING
TO DEFINITIONS FOR THE "SOUTH CAROLINA BUSINESS
CORPORATIONS ACT OF 1988", SO AS TO PROVIDE A
DEFINITION FOR "PUBLIC CORPORATION" AND DEFINE IT TO
MEAN A CORPORATION, A CLASS OF WHOSE EQUITY
SECURITIES ARE REGISTERED WITH A FEDERAL AGENCY
UNDER THE SECURITIES EXCHANGE ACT OF 1934 OR A
SUCCESSOR ACT.
Be it enacted by the General Assembly of the State of South Carolina:
Terms, conditions of rights, options, warrants; etc.
SECTION 1. 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
such 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 any transferee
or any such holder or owner, or that invalidate or void the rights, options,
or warrants held by the holder or owner or by the transferee.
Determinations by the board of directors whether to impose, enforce,
waive, or otherwise render ineffective any such restrictions or conditions
may be judicially reviewed in an appropriate proceeding."
Shareholders, special meetings; nonpublic corporation; etc.
SECTION 2. 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."
Shareholders' list; nonpublic, public corporations
SECTION 3. 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 corporations which are not public
corporations, on the date on which notice of the meeting is given for
which the list was prepared and, in the case of public corporations, not
later than the fifth business day following such date, in either case,
continuing through the meeting, at the corporation's principal office or at
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."
Number, election of directors; nonpublic corporations
SECTION 4. Section 33-8-103(b) of the 1976 Code is amended to
read:
"(b) In the case of a corporation which is not 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."
Amendment of articles, bylaws; nonpublic corporations
SECTION 5. 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."
Merger of subsidiary; nonpublic corporations
SECTION 6. 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."
Sale, mortgage of assets; public corporation's transfer of its property;
etc.
SECTION 7. Section 33-12-101 of the 1976 Code is amended to read:
"Section 33-12-101. (a) A corporation, on the terms and conditions
and for the consideration determined by the board of directors, may:
(1) sell, lease, exchange, or otherwise dispose of all, or substantially
all, of its property in the usual and regular course of business; or
(2) mortgage, pledge, dedicate to the repayment of indebtedness
(whether with or without recourse), or otherwise encumber all, or
substantially all, of its property whether or not in the usual and regular
course of business.
(b) A public corporation, on the terms and conditions and for the
consideration determined by the board of directors, may transfer any or
all of its property to a corporation, all the shares of which are owned by
the public corporation.
(c) Unless the articles of incorporation require it, approval by the
shareholders of a transaction described in subsection (a) or (b) is not
required."
Dissenters' right to dissent; shareholder entitled to receive fair value
of shares; etc.
SECTION 8. 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 any of the
following corporate actions:
(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 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 corporations which are not public corporations,
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) Notwithstanding subsection (A), no dissenters' rights under this
section are available for shares of any class or series of shares which, at
the record date fixed to determine shareholders entitled to receive notice
of a vote at the meeting of shareholders to act upon the agreement of
merger or exchange, were either listed on a national securities exchange
or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc."
Definitions; Business Corporations Act; definition of "public
corporation"
SECTION 9. Section 33-1-400 of the 1976 Code is amended by
adding:
"(28) 'Public corporation' means a corporation, a class of whose equity
securities are registered with a federal agency under the Securities
Exchange Act of 1934 or a successor act to the Securities Exchange Act
of 1934."
Time effective
SECTION 10. This act takes effect upon approval by the Governor.
Approved the 9th day of June, 1998. |