North Carolina § 55-9-01 - Short title and definitions.

§ 55-9-01. Short title and definitions.

The provisions of this Article shall be known and may be cited as The North Carolina Shareholder Protection Act. In this Article: "Business combination" includes any merger, consolidation, or conversion of a corporation with or into any other corporation or any unincorporated entity, or the sale or lease of all or any substantial part of the corporation's assets to, or any payment, sale or lease to the corporation or any subsidiary thereof in exchange for securities of the corporation of any assets (except assets having an aggregate fair market value of less than five million dollars ($5,000,000)) of any other entity. "Common stock" means the shares of capital stock of the corporation that were not entitled to preference over any other shares, either in payment of dividends or in dissolution, at the time that the other entity acquired in excess of ten percent (10%) of the voting shares. "Continuing director" means a person who was a member of the board of directors of the corporation elected by the public shareholders prior to the time that the other entity acquired in excess of ten percent (10%) of the voting shares of the corporation, or a person recommended to succeed a continuing director by a majority of the continuing directors. "Exchange Act" means the act of Congress known as the Securities Exchange Act of 1934, as the same has been or hereafter may be amended from time to time. "Other consideration to be received" means, for the purposes of G.S. 55-9-03(1) and G.S. 55-9-03(2), the corporation's common stock retained by its existing public shareholders in the event of a business combination with the other entity in which the corporation is the surviving corporation. "Other entity" includes any domestic or foreign corporation, person or other form of entity and any such entity with which it or its "affiliate" or "associate" has an agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of capital stock of the corporation, or which is its "affiliate" or "associate", as those terms are defined in the General Rules and Regulations under the Exchange Act, together with the successors and assigns of such persons in any transaction or series of transactions not involving a public offering of the corporation's capital stock within the meaning of the Securities Act of 1933, as amended. "Voting shares" means shares of the corporation's capital stock entitled to vote in the election of directors. History (1987, c. 88, s. 1; c. 124, s. 1; 1989, c. 265, s. 1; 1999-369, s. 1.5; 2001-387, s. 16.) Editor's Note. - Article 9, as set out in Session Laws 1989, ch. 265, is essentially former Article 7 of Chapter 55 , as enacted by Session Laws 1987, c. 88, s. 1. Amendments by Session Laws 1987, c. 124, ss. 1, 1.1 and 2 expired by the terms of that act on June 30, 1989. This article is not in the Revised Model Business Corporation Act, and there are no Official Comments or North Carolina Comments thereto. The present Article 9, as set out in Session Laws 1989, c. 265, differs from former Article 7 as it was on June 30, 1989, in the following particulars: (1) In G.S. 55-9-01 , the definition of "corporation" found in former G.S. 55-75 has expired and was not reenacted (see Session Laws 1987, c. 124, s. 1) and the definition of "other entity" has been amended by changing the first reference to "corporation" to read "domestic or foreign corporation." (2) In G.S. 55-9-05 , there are new opt-out provisions different from those of former G.S. 55-79. (3) Former G.S. 55-79.1 and 55-80, relating to conflict of laws and severability, expired and were not reenacted. (See Session Laws 1987, c. 124, ss. 1.1, 2.) Session Laws 2001-387, s. 154(b) provides that nothing in this act shall supersede the provisions of Article 10 or 65 of Chapter 58 of the General Statutes, and this act does not create an alternate means for an entity governed by Article 65 of Chapter 58 of the General Statutes to convert to a different business form. Legal Periodicals. - For note, "The North Carolina Shareholder Protection Act," see 66 N.C.L. Rev. 1146 (1988). For article, "State Anti-Takeover Legislation: The Second and Third Generations," see 23 Wake Forest L. Rev. 77 (1988). For article, "Government Regulation of Business: Golden Parachutes Revisited," see 23 Wake Forest L. Rev. 121 (1988). For comment, "The Duty to Disclose v. The Duty Not to Mislead During Merger Negotiations," see 23 Wake Forest L. Rev. 143 (1988). For comment, "Fiduciary Duties of Directors: How Far Do They Go?," see 23 Wake Forest L. Rev. 163 (1988). For article, "Should Corporate Statutes Providing Special Protection for Directors Be Limited to Publicly Traded Corporations?," see 24 Wake Forest L. Rev. 79 (1989). For article, "The Corporate Persona, Contract (and Market) Failure, and Moral Values," see 69 N.C.L. Rev. 273 (1991). For article, "The Creation of North Carolina's Limited Liability Corporation Act," see 32 Wake Forest L. Rev. 179 (1997). For article, "Silencing the Shareholder's Voice," see 80 N.C.L. Rev. 1897 (2002). For article, "The Public Choice Problem in Corporate Law: Corporate Social Responsibility After Citizens United," see 89 N.C.L. Rev. 1197 (2011). For article, "Friends with Benefits: Measuring Corruption in Politics After Citizens United," see 36 N.C. Cent. L. Rev. 1 (2013). For article, "Is the Corporate Director's Duty of Care a 'Fiduciary' Duty? Does it Matter?," see 48 Wake Forest L. Rev. 1027 (2013). For article, "Shareholder Voting and the Symbolic Politics of Corporation as Contract,” see 53 Wake Forest L. Rev. 512 (2018).