KRS 271B.12-220: Exemptions from minimum share vote requirements.

(1) For purposes of subsection (2) of this section:

(a) "Announcement date" means the first general public announcement of the

proposal or intention to make a proposal of the business combination or its

first communication generally to shareholders of the corporation, whichever is

earlier;

(b) "Determination date" means the date on which an interested shareholder first

became an interested shareholder; and

(c) "Valuation date" means:

1. For a business combination voted upon by shareholders, the latter of the

day prior to the date of the shareholders vote or the date twenty (20)

days prior to the consummation of the business combination; and

2. For a business combination not voted upon by shareholders, the date of

the consummation of the business combination.

(2) The vote required by KRS 271B.12-210 does not apply to a business combination if

each of the following conditions is met:

(a) The aggregate amount of the cash and the market value as of the valuation

date of consideration, other than cash to be received p er share by holders of

common stock in such business combination, is at least equal to the highest of

the following:

1. The highest per share price (including any brokerage commissions,

transfer taxes and soliciting dealers' fees) paid by the interested

shareholder for any shares of common stock of the same class or series

acquired by it:

a. Within the five (5) year period immediately prior to the

announcement date of the proposal of the business combination;

b. In the transaction in which it became an inte rested shareholder,

whichever is higher; or

2. The market value per share of common stock of the same class or series

on the announcement date or on the determination date, whichever is

higher; or

3. The price per share equal to the market value per share of common stock

of the same class or series determined pursuant to subparagraph 2. of

this paragraph, multiplied by the fraction of:

a. The highest per share price, including any brokerage commissions,

transfer taxes and soliciting dealers' fees, paid by the interested

shareholder for any shares of common stock of the same class or

series acquired by it within the five (5) year period immediately

prior to the announcement date, over

b. The market value per share of common stock of the same class or

series on the first day in such five (5) year period on which the

interested shareholder acquired any shares of common stock;

(b) The aggregate amount of the cash and the market value as of the valuation

date of consideration other than cash to be received per share by holders of

shares of any class or series of outstanding stock other than common stock is

at least equal to the highest of the following, whether or not the interested

shareholder has previously acquired any shares of a particular class or series

of stock:

1. The highest per share price, including any brokerage commissions,

transfer taxes and soliciting dealers' fees, paid by the interested

shareholder for any shares of such class of stock acquired by it:

a. Within the five (5) year period immediately prior to the

announcement date of the proposal of the business combination;

b. In the transaction in which it became an interested shareholder,

whichever is higher; or

2. The highest preferential amount per share to which the holders of shares

of such class of stock are entitled in the event of any voluntary or

involuntary liquidation, dissolution or winding up of the corporation;

3. The market value per share of such class of stock on the announcement

date or on the determination date, whichever is higher; or

4. The price per share equal to the market value per share of such class of

stock determined pursuant to subparagraph 3. of this paragraph,

multiplied by the fraction of:

a. The highest per share price, including any brokerage commissions,

transfer taxes and soliciting dealers' fees, paid by the interested

shareholder for any shares of any class of voting stock acquired by

it within the five (5) year period immediately prior to the

announcement date, over

b. The market value per share of the same class of voting stock on the

first day in such five (5) year period on which the interested

shareholder acquired any shares of the same class of voting stock.

(c) In making any price calculation under this section, appropriate adjustments

shall be made to reflect any reclassification, including any reverse stock split;

recapitalization; reorganization; or any similar transaction which has the effect

of reducing the number of outstanding shares of the stock. The consideration

to be received by holders of any class or series of outstanding stock is to be in

cash or in the same form as the interested shareholder has previously paid for

shares of the same class or series of stock. If the interested shareholder ha s

paid for shares of any class of stock with varying forms of consideration, the

form of consideration for such class of stock shall be either cash or the form

used to acquire the largest number of shares of such class or series of stock

previously acquired by it;

(d) 1. After the interested shareholder has become an interested shareholder

and prior to the consummation of such business combination:

a. There shall have been no failure to declare and pay, at the regular

date therefor, any full periodic divide nds, whether or not

cumulative, on any outstanding preferred stock of the corporation;

b. There shall have been no reduction in the annual rate of dividends

paid on any class or series of stock of the corporation that is not

preferred stock, except as nece ssary to reflect any subdivision of

the stock; and an increase in such annual rate of dividends as

necessary to reflect any reclassification, including any reverse

stock split; recapitalization; reorganization; or any similar

transaction which has the effe ct of reducing the number of

outstanding shares of the stock; and

c. The interested shareholder did not become the beneficial owner of

any additional shares of stock of the corporation, except as part of

the transaction which resulted in such interested sh areholder

becoming an interested shareholder or by virtue of proportionate

stock splits or stock dividends.

2. The provisions of sub-subparagraphs a. and b. of subparagraph 1. of this

paragraph do not apply if no interested shareholder or an affiliate or

associate of the interested shareholder voted as a director of the

corporation in a manner inconsistent with such sub -subparagraphs and

the interested shareholder, within ten (10) days after any act or failure to

act inconsistent with such sub -subparagraphs, notifies the board of

directors of the corporation in writing that the interested shareholder

disapproves thereof and requests in good faith that the board of directors

rectify such act or failure to act.

(3) (a) Whether or not such business combinations are authorized or consummated in

whole or in part after July 13, 1984, or after the interested shareholder became

an interested shareholder, the requirements of KRS 271B.12 -210 do not apply

to business combinations that specifically, generally, or general ly by types, as

to specifically identified or unidentified existing or future interested

shareholders or their affiliates or associates, have been approved or exempted

therefrom by resolution of the board of directors of the corporation prior to

two (2) months after July 13, 1984, or such earlier date as may be irrevocably

established by resolution of the board of directors; and

(b) Unless by its terms a resolution adopted under this subsection is made

irrevocable, it may be altered or repealed by the board of directors, but this

shall not affect any business combinations that have been consummated, or

are the subject of an existing agreement entered into, prior to the alteration or

repeal.

(4) (a) Unless the articles of incorporation or bylaws of the corpor ation specifically

provide otherwise, the requirements of KRS 271B.12 -210 do not apply to

business combinations of a corporation that, on July 13, 1984, had an existing

interested shareholder, whether a business combination is with the existing

shareholder or with any other person who becomes an interested shareholder,

after July 13, 1984, or their present or future affiliates, unless, at any time after

July 13, 1984, the board of directors of the corporation elects by resolution,

adopted by a majority of t he continuing directors at a meeting of the board of

directors at which a quorum consisting of at least a majority of the continuing

directors is present, to be subject, in whole or in part, specifically, generally,

or generally by types, as to specificall y identified or unidentified interested

shareholders, to the requirements of KRS 271B.12-210;

(b) The articles of incorporation or bylaws of the corporation may provide that if

the board of directors adopts a resolution under paragraph (a) of this

subsection, the resolution shall be subject to approval of the shareholders in

the manner and by the vote specified in the articles of incorporation or the

bylaws;

(c) An election under this subsection may be added to but may not be altered or

repealed except by an amendment to the articles of incorporation adopted by a

vote of shareholders meeting the requirements of subsection (5)(a)2. of this

section; and

(d) If a corporation elects under this subsection to be included within the

provisions of KRS 271B.12-210 generally, without qualification or limitation,

it shall file with the secretary of state articles of amendment, including a copy

of the resolution making the election and a statement describing the manner in

which the resolution was adopted. The articles of amendment shall be

executed in the manner required by KRS 271B.10-060.

(5) (a) Unless the articles of incorporation of the corporation provide otherwise, the

requirements of a shareholder vote and board approval in KRS 271B.12 -210

do not apply to any business combination of:

1. A corporation which does not have on the date any intere sted

shareholder became an interested shareholder:

a. Five hundred (500) or more beneficial owners of its stock;

b. Its principal executive office located in this state; and

c. One (1) or more of the following:

(i) More than two hundred (200) beneficial ow ners of its stock residing in this

state;

(ii) More than ten percent (10%) of the beneficial owners of its stock residing in

this state;

(iii) More than ten percent (10%) of its outstanding stock owned by residents of

this state;

(iv) More than one hundred (100) employees of the corporation and its

subsidiaries working within this state; or

(v) Assets located in this state and owned by, or owned by a person or entity

controlled by, the corporation with a value of at least one million dollars

($1,000,000);

2. A corporation whose original articles of incorporation have a provision,

or whose shareholders adopt an amendment to the articles of

incorporation after July 13, 1984, by a vote of at least eighty percent

(80%) of the votes entitled to be cast by outstan ding shares of voting

stock of the corporation, voting together as a single voting group and

two-thirds (2/3) of the votes entitled to be cast by persons, if any, who

are not interested shareholders of the corporation, voting together as a

single voting gr oup, expressly electing not to be governed by KRS

271B.12-210; or

3. An investment company registered under the federal Investment

Company Act of 1940, as amended; a bank or a bank holding company

as defined in the federal Bank Holding Company Act of 1956, as

amended; a savings and loan holding company as defined in the federal

Savings and Loan Holding Company Amendments of 1967, as amended;

and a domestic insurer as defined under KRS 304.1-070; and

(b) For purposes of subparagraph 1. of paragraph (a) of th is subsection, all

shareholders of a corporation who have executed an agreement to which the

corporation is an executing party governing the purchase and sale of stock of

the corporation or a voting trust agreement governing stock of the corporation

shall be considered a single beneficial owner of the stock covered by the

agreement.