{"data":{"id":"us-ky/krs-271b.12-220","jurisdiction":"us-ky","citation":"KRS 271B.12-220","heading":"Exemptions from minimum share vote requirements.","body":"(1) For purposes of subsection (2) of this section:\n(a) \"Announcement date\" means the first general public announcement of the\nproposal or intention to make a proposal of the business combination or its\nfirst communication generally to shareholders of the corporation, whichever is\nearlier;\n(b) \"Determination date\" means the date on which an interested shareholder first\nbecame an interested shareholder; and\n(c) \"Valuation date\" means:\n1. For a business combination voted upon by shareholders, the latter of the\nday prior to the date of the shareholders vote or the date twenty (20)\ndays prior to the consummation of the business combination; and\n2. For a business combination not voted upon by shareholders, the date of\nthe consummation of the business combination.\n(2) The vote required by KRS 271B.12-210 does not apply to a business combination if\neach of the following conditions is met:\n(a) The aggregate amount of the cash and the market value as of the valuation\ndate of consideration, other than cash to be received p er share by holders of\ncommon stock in such business combination, is at least equal to the highest of\nthe following:\n1. The highest per share price (including any brokerage commissions,\ntransfer taxes and soliciting dealers' fees) paid by the interested\nshareholder for any shares of common stock of the same class or series\nacquired by it:\na. Within the five (5) year period immediately prior to the\nannouncement date of the proposal of the business combination;\nb. In the transaction in which it became an inte rested shareholder,\nwhichever is higher; or\n2. The market value per share of common stock of the same class or series\non the announcement date or on the determination date, whichever is\nhigher; or\n3. The price per share equal to the market value per share of common stock\nof the same class or series determined pursuant to subparagraph 2. of\nthis paragraph, multiplied by the fraction of:\na. The highest per share price, including any brokerage commissions,\ntransfer taxes and soliciting dealers' fees, paid by the interested\nshareholder for any shares of common stock of the same class or\nseries acquired by it within the five (5) year period immediately\nprior to the announcement date, over\nb. The market value per share of common stock of the same class or\nseries on the first day in such five (5) year period on which the\ninterested shareholder acquired any shares of common stock;\n(b) The aggregate amount of the cash and the market value as of the valuation\ndate of consideration other than cash to be received per share by holders of\nshares of any class or series of outstanding stock other than common stock is\nat least equal to the highest of the following, whether or not the interested\nshareholder has previously acquired any shares of a particular class or series\nof stock:\n1. The highest per share price, including any brokerage commissions,\ntransfer taxes and soliciting dealers' fees, paid by the interested\nshareholder for any shares of such class of stock acquired by it:\na. Within the five (5) year period immediately prior to the\nannouncement date of the proposal of the business combination;\nb. In the transaction in which it became an interested shareholder,\nwhichever is higher; or\n2. The highest preferential amount per share to which the holders of shares\nof such class of stock are entitled in the event of any voluntary or\ninvoluntary liquidation, dissolution or winding up of the corporation;\n3. The market value per share of such class of stock on the announcement\ndate or on the determination date, whichever is higher; or\n4. The price per share equal to the market value per share of such class of\nstock determined pursuant to subparagraph 3. of this paragraph,\nmultiplied by the fraction of:\na. The highest per share price, including any brokerage commissions,\ntransfer taxes and soliciting dealers' fees, paid by the interested\nshareholder for any shares of any class of voting stock acquired by\nit within the five (5) year period immediately prior to the\nannouncement date, over\nb. The market value per share of the same class of voting stock on the\nfirst day in such five (5) year period on which the interested\nshareholder acquired any shares of the same class of voting stock.\n(c) In making any price calculation under this section, appropriate adjustments\nshall be made to reflect any reclassification, including any reverse stock split;\nrecapitalization; reorganization; or any similar transaction which has the effect\nof reducing the number of outstanding shares of the stock. The consideration\nto be received by holders of any class or series of outstanding stock is to be in\ncash or in the same form as the interested shareholder has previously paid for\nshares of the same class or series of stock. If the interested shareholder ha s\npaid for shares of any class of stock with varying forms of consideration, the\nform of consideration for such class of stock shall be either cash or the form\nused to acquire the largest number of shares of such class or series of stock\npreviously acquired by it;\n(d) 1. After the interested shareholder has become an interested shareholder\nand prior to the consummation of such business combination:\na. There shall have been no failure to declare and pay, at the regular\ndate therefor, any full periodic divide nds, whether or not\ncumulative, on any outstanding preferred stock of the corporation;\nb. There shall have been no reduction in the annual rate of dividends\npaid on any class or series of stock of the corporation that is not\npreferred stock, except as nece ssary to reflect any subdivision of\nthe stock; and an increase in such annual rate of dividends as\nnecessary to reflect any reclassification, including any reverse\nstock split; recapitalization; reorganization; or any similar\ntransaction which has the effe ct of reducing the number of\noutstanding shares of the stock; and\nc. The interested shareholder did not become the beneficial owner of\nany additional shares of stock of the corporation, except as part of\nthe transaction which resulted in such interested sh areholder\nbecoming an interested shareholder or by virtue of proportionate\nstock splits or stock dividends.\n2. The provisions of sub-subparagraphs a. and b. of subparagraph 1. of this\nparagraph do not apply if no interested shareholder or an affiliate or\nassociate of the interested shareholder voted as a director of the\ncorporation in a manner inconsistent with such sub -subparagraphs and\nthe interested shareholder, within ten (10) days after any act or failure to\nact inconsistent with such sub -subparagraphs, notifies the board of\ndirectors of the corporation in writing that the interested shareholder\ndisapproves thereof and requests in good faith that the board of directors\nrectify such act or failure to act.\n(3) (a) Whether or not such business combinations are authorized or consummated in\nwhole or in part after July 13, 1984, or after the interested shareholder became\nan interested shareholder, the requirements of KRS 271B.12 -210 do not apply\nto business combinations that specifically, generally, or general ly by types, as\nto specifically identified or unidentified existing or future interested\nshareholders or their affiliates or associates, have been approved or exempted\ntherefrom by resolution of the board of directors of the corporation prior to\ntwo (2) months after July 13, 1984, or such earlier date as may be irrevocably\nestablished by resolution of the board of directors; and\n(b) Unless by its terms a resolution adopted under this subsection is made\nirrevocable, it may be altered or repealed by the board  of directors, but this\nshall not affect any business combinations that have been consummated, or\nare the subject of an existing agreement entered into, prior to the alteration or\nrepeal.\n(4) (a) Unless the articles of incorporation or bylaws of the corpor ation specifically\nprovide otherwise, the requirements of KRS 271B.12 -210 do not apply to\nbusiness combinations of a corporation that, on July 13, 1984, had an existing\ninterested shareholder, whether a business combination is with the existing\nshareholder or with any other person who becomes an interested shareholder,\nafter July 13, 1984, or their present or future affiliates, unless, at any time after\nJuly 13, 1984, the board of directors of the corporation elects by resolution,\nadopted by a majority of t he continuing directors at a meeting of the board of\ndirectors at which a quorum consisting of at least a majority of the continuing\ndirectors is present, to be subject, in whole or in part, specifically, generally,\nor generally by types, as to specificall y identified or unidentified interested\nshareholders, to the requirements of KRS 271B.12-210;\n(b) The articles of incorporation or bylaws of the corporation may provide that if\nthe board of directors adopts a resolution under paragraph (a) of this\nsubsection, the resolution shall be subject to approval of the shareholders in\nthe manner and by the vote specified in the articles of incorporation or the\nbylaws;\n(c) An election under this subsection may be added to but may not be altered or\nrepealed except by an amendment to the articles of incorporation adopted by a\nvote of shareholders meeting the requirements of subsection (5)(a)2. of this\nsection; and\n(d) If a corporation elects under this subsection to be included within the\nprovisions of KRS 271B.12-210 generally, without qualification or limitation,\nit shall file with the secretary of state articles of amendment, including a copy\nof the resolution making the election and a statement describing the manner in\nwhich the resolution was adopted. The articles of  amendment shall be\nexecuted in the manner required by KRS 271B.10-060.\n(5) (a) Unless the articles of incorporation of the corporation provide otherwise, the\nrequirements of a shareholder vote and board approval in KRS 271B.12 -210\ndo not apply to any business combination of:\n1. A corporation which does not have on the date any intere sted\nshareholder became an interested shareholder:\na. Five hundred (500) or more beneficial owners of its stock;\nb. Its principal executive office located in this state; and\nc. One (1) or more of the following:\n(i) More than two hundred (200) beneficial ow ners of its stock residing in this\nstate;\n(ii) More than ten percent (10%) of the beneficial owners of its stock residing in\nthis state;\n(iii) More than ten percent (10%) of its outstanding stock owned by residents of\nthis state;\n(iv) More than one hundred  (100) employees of the corporation and its\nsubsidiaries working within this state; or\n(v) Assets located in this state and owned by, or owned by a person or entity\ncontrolled by, the corporation with a value of at least one million dollars\n($1,000,000);\n2. A corporation whose original articles of incorporation have a provision,\nor whose shareholders adopt an amendment to the articles of\nincorporation after July 13, 1984, by a vote of at least eighty percent\n(80%) of the votes entitled to be cast by outstan ding shares of voting\nstock of the corporation, voting together as a single voting group and\ntwo-thirds (2/3) of the votes entitled to be cast by persons, if any, who\nare not interested shareholders of the corporation, voting together as a\nsingle voting gr oup, expressly electing not to be governed by KRS\n271B.12-210; or\n3. An investment company registered under the federal Investment\nCompany Act of 1940, as amended; a bank or a bank holding company\nas defined in the federal Bank Holding Company Act of 1956,  as\namended; a savings and loan holding company as defined in the federal\nSavings and Loan Holding Company Amendments of 1967, as amended;\nand a domestic insurer as defined under KRS 304.1-070; and\n(b) For purposes of subparagraph 1. of paragraph (a) of th is subsection, all\nshareholders of a corporation who have executed an agreement to which the\ncorporation is an executing party governing the purchase and sale of stock of\nthe corporation or a voting trust agreement governing stock of the corporation\nshall be considered a single beneficial owner of the stock covered by the\nagreement.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=13431","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:19Z","sha256":"a1af5541f85e7ec48501e2b38ace452711e4beb552b4ad7c2427e8d146b399df","source_id":"us-ky","stale":false,"prev":"us-ky/krs-271b.12-210","next":"us-ky/krs-271b.12-230"},"notice":"GroundRules: Original legal text. Not legal advice."}