10-2704. Limitation on share repurchases;
definition
A. An issuing public corporation shall not, directly or indirectly, purchase or
agree to purchase any shares from a beneficial owner of more than five per cent of the
voting power of the issuing public corporation for more than the average market price of
the shares if the shares have been beneficially owned by the beneficial owner for less
than three years, unless either:
1. The purchase or agreement to purchase is approved at a meeting of shareholders
by the affirmative vote of the holders of a majority of the voting power of all shares
excluding shares beneficially owned by the beneficial owner or its affiliates or
associates or by any officer or director of the issuing public corporation.
2. The issuing public corporation makes an offer, of at least equal value per
share, to all holders of shares of such class or series and to all holders of any class
or series into which the shares may be converted.
B. For the purposes of this section, "average market price" means the average
closing sale price during the thirty trading days immediately preceding the purchase of
the shares in question, or if the person or persons have commenced a tender offer or have
announced an intention to seek control of the issuing public corporation, during the
thirty trading days preceding the earlier of the commencement of the tender offer or the
making of the announcement, of a share on the composite tape for New York stock exchange
listed shares or, if the shares are not quoted on the composite tape or not listed on the
New York stock exchange, on the principal United States securities exchange registered
under the securities exchange act of 1934 on which the shares are listed or, if the
shares are not listed on any such exchange, on the national association of securities
dealers, inc. automated quotations national market system or, if the shares are not
quoted on the national association of securities dealers, inc. automated quotations
national market system, the average closing bid quotation, during the thirty trading days
preceding the purchase of the shares in question of a share on the national association
of securities dealers, inc. automated quotations system or any system then in use, or if
the person or persons have commenced a tender offer or have announced an intention to
seek control of the issuing public corporation, during the thirty trading days preceding
the earlier of the commencement of the tender offer or the making of the announcement,
except that if no quotation is available the average market price is the fair market
value on the date of purchase of the shares in question of a share as determined in good
faith by the board of directors of the issuing public corporation.
|