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     §414-332  Sale of assets other than in regular course of business


Published: 2015

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     §414-332  Sale of assets other than in

regular course of business.  (a)  A corporation may sell, lease, exchange,

or otherwise dispose of all, or substantially all, of its property (with or

without the goodwill), otherwise than in the usual and regular course of

business, on the terms and conditions and for the consideration determined by

the corporation's board of directors, if the board of directors proposes and

its shareholders approve the proposed transaction.

     (b)  For a transaction to be authorized:

     (1)  The board of directors must recommend the

proposed transaction to the shareholders unless the board of directors

determines that because of conflict of interest or other special circumstances

it should make no recommendation and communicates the basis for its

determination to the shareholders with the submission of the proposed

transaction; and

     (2)  The shareholders entitled to vote must approve

the transaction.

     (c)  The board of directors may condition its

submission of the proposed transaction on any basis.

     (d)  The corporation shall notify each

shareholder, whether or not entitled to vote, of the proposed shareholders'

meeting in accordance with section 414-125.  The notice must also state that

the purpose, or one of the purposes, of the meeting is to consider the sale,

lease, exchange, or other disposition of all, or substantially all, the

property of the corporation and contain or be accompanied by a description of

the transaction.

     (e)  With respect to corporations incorporated

on or after July 1, 1987, at the meeting the shareholders may authorize

the sale, lease, exchange, or other disposition and may fix, or may authorize

the board of directors to fix, any or all of the terms and conditions thereof

and the consideration to be received by the corporation therefor.  The

authorization shall require the affirmative vote of the holders of a majority

of the shares of the corporation entitled to vote thereon, unless any class of

shares is entitled to vote thereon as a class, in which event the authorization

shall require the affirmative vote of the holders of a majority of the shares

of each class of shares entitled to vote as a class thereon and of the total

shares entitled to vote thereon.

     (f)  With respect to corporations incorporated

before July 1, 1987, at the meeting the shareholders may authorize the

sale, lease, exchange, or other disposition and may fix, or may authorize the

board of directors to fix, any or all of the terms and conditions therefor. 

The authorization shall require the affirmative vote of the holders of

three-fourths of the shares of the corporation entitled to vote as a class

thereon and of the total shares entitled to vote thereon.  The articles of

incorporation may be amended by the vote set forth in the preceding sentence to

provide for a lesser proportion of shares, or of any class or series thereof,

than is provided in the preceding sentence, in which case the articles of

incorporation shall control; provided that the lesser proportion shall not be

less than the proportion set forth in subsection (e).

     (g)  After a sale, lease, exchange, or other

disposition of property is authorized, the transaction may be abandoned

(subject to any contractual rights) without further shareholder action.

     (h)  A transaction that constitutes a

distribution is governed by section 414-111 and not by this section.

     (i)  A sale, lease, exchange, or other

disposition of the property of a corporation shall not be deemed to be the

sale, lease, exchange, or other disposition of all or substantially all the

property of the corporation if the corporation is retaining sufficient property

to continue one or more significant business segments or lines of the

corporation after the sale, lease, exchange, or other disposition. 

Furthermore, the business segments or lines retained must not be only temporary

operations or merely a pretext to avoid shareholders' rights which might

otherwise arise under this chapter. [L 2000, c 244, pt of §1; am L 2001, c 129,

§37]