14A:10-12 - Shareholders' rights on other corporate acquisitions - New Jersey Statutes

14A:10-12.   Shareholders' rights on other corporate acquisitions
     (1)  Shareholders of a corporation which proposes to acquire, directly or through a subsidiary, in exchange for its shares, obligations or other securities, some or all of the outstanding shares of another corporation, or some or all of the assets of a corporation, a business trust, a business proprietorship or a business partnership, shall have the same rights, if any, as they would if they were shareholders of a surviving corporation in a merger

    (a)  To notice of the proposed acquisition;

    (b)  To vote on the proposed acquisition; and

    (c)  To dissent from the proposed acquisition and be paid the fair value of their shares, if:

    (i)  the number of voting shares outstanding immediately after the transaction, plus the number of voting shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the transaction, will exceed by more than 40% the total number of voting shares of the corporation outstanding immediately before the transaction; or

      (ii)  the number of participating shares outstanding immediately after the transaction, plus the number of participating shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the transaction will exceed by more than 40% the total number of participating shares of the corporation outstanding immediately before the transaction.

    (2)  As used in subsection 14A:10-12(1):

    (a)  "Participating shares" means shares that entitle their holders to participate without limitation in distributions.

    (b)  "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.

    (added) 1973,c.366,s.59; amended 1988,c.94,s.62.