South Carolina General Assembly
112th Session, 1997-1998

Bill 693


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                       693
Type of Legislation:               General Bill GB
Introducing Body:                  Senate
Introduced Date:                   19970424
Primary Sponsor:                   Reese 
All Sponsors:                      Reese 
Drafted Document Number:           dka\4451mm.97
Residing Body:                     Senate
Current Committee:                 Judiciary Committee 11 SJ
Subject:                           Public corporations,
                                   shareholders, articles of
                                   incorporation, mergers, etc.;
                                   Businesses and Corporations



History


Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________
Senate  19970424  Introduced, read first time,             11 SJ
                  referred to Committee

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

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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