Connecticut General Statutes
Chapter 601 - Business Corporations
Section 33-842. - Exceptions.

(a) For purposes of subsection (b) of this section:

(1) “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;
(2) “Determination date” means the date on which an interested shareholder first became an interested shareholder;
(3) “Valuation date” means: (A) For a business combination voted upon by shareholders, the later of the day prior to the date of the shareholders vote or the date twenty days prior to the consummation of the business combination; and (B) for a business combination not voted upon by shareholders, the date of the consummation of the business combination.
(b) The vote required by section 33-841 does not apply to a business combination as defined in subparagraph (A) of subdivision (4) of section 33-840 if each of the following conditions is met:
(1) 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 common stock of each class or series in such business combination is at least equal to the highest of the following: (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: (i) Within the two-year period immediately prior to the announcement date of the business combination; or (ii) in the transaction in which it became an interested shareholder, whichever is higher; or (B) 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 (C) the price per share equal to the market value per share of common stock of the same class or series determined pursuant to subdivision (1)(B) of this subsection, multiplied by the fraction of: (i) The highest per share price, including any brokerage commission, 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 two-year period immediately prior to the announcement date, over (ii) the market value per share of common stock of the same class or series on the first day in such two-year period on which the interested shareholder acquired any shares of common stock.
(2) 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: (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 such class or series of stock acquired by it: (i) Within the two-year period immediately prior to the announcement date of the business combination; or (ii) in the transaction in which it became an interested shareholder, whichever is higher; or (B) the highest preferential amount per share to which the holders of shares of such class or series of stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; or (C) the market value per share of such class or series of stock on the announcement date or on the determination date, whichever is higher; or (D) the price per share equal to the market value per share of such class or series of stock determined pursuant to subdivision (2)(C) of this subsection, multiplied by the fraction of: (i) 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 or series of voting stock acquired by it within the two-year period immediately prior to the announcement date, over (ii) the market value per share of the same class or series of voting stock on the first day in such two-year period on which the interested shareholder acquired any shares of the same class or series of voting stock.
(3) 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 has paid for shares of any class or series of stock with varying forms of consideration, the form of consideration for such class or series 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.
(4) (A) After the interested shareholder has become an interested shareholder and prior to the consummation of such business combination: (i) There shall have been no failure to declare and pay at the regular date therefor any full periodic dividends, whether or not cumulative, on any outstanding preferred stock of the corporation; (ii) 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 necessary 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 effect of reducing the number of outstanding shares of the stock; and (iii) the interested shareholder shall not have become the beneficial owner of any additional shares of stock of the corporation except as part of the transaction which resulted in such interested shareholder becoming an interested shareholder or by virtue of proportionate stock splits or stock dividends. (B) The provisions of subdivisions (4)(A)(i) and (4)(A)(ii) of this subsection 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 subdivisions (4)(A)(i) and (4)(A)(ii) and the interested shareholder, within ten days after any act or failure to act inconsistent with subdivisions (4)(A)(i) and (4)(A)(ii), 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.
(5) After the interested shareholder has become an interested shareholder, the interested shareholder shall not have received the benefit, directly or indirectly, except proportionately as a shareholder, of any loans, advances, guarantee, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation or any of its subsidiaries, whether in anticipation of or in connection with such business combination or otherwise.
(c) (1) Unless the certificate of incorporation provides otherwise, whether or not such business combinations are authorized or consummated in whole or in part after June 4, 1984, or after the interested shareholder became an interested shareholder, the requirements of section 33-841 do not apply to business combinations that specifically, generally, or generally 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: (A) Within two months after June 4, 1984, or such earlier date as may be irrevocably established by resolution of the board of directors; or (B) if involving transactions with a particular interested shareholder or its existing or future affiliates or associates, at any time prior to the time that the interested shareholder first became an interested shareholder; (2) 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 any existing agreement entered into, prior to the alteration or repeal.
(d) Unless the certificate of incorporation provides otherwise, the requirements of section 33-841 do not apply to any business combination of: (1) A corporation which is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; (2) a corporation whose original certificate of incorporation has a provision or whose shareholders adopt a certificate of incorporation amendment after June 4, 1984, by a vote of the holders of at least eighty per cent of the voting power of the outstanding shares of the voting stock of the corporation and the holders of at least two-thirds of the voting power of the outstanding shares of voting stock of the corporation other than voting stock held by interested shareholders of the corporation, or affiliates or associates of interested shareholders, expressly electing not to be governed by sections 33-840 to 33-842, inclusive; or (3) an investment company registered under the Investment Company Act of 1940.
(e) A business combination involving a corporation that has a certificate of incorporation provision which provides that a business combination may be approved by an affirmative vote of a lesser proportion of the voting power of the outstanding shares of voting stock of the corporation than the proportion required by section 33-841 is subject to the voting requirements of said section unless one of the requirements or exemptions of subsection (b), (c) or (d) of this section have been met.
(P.A. 94-186, S. 143, 215.)
History: P.A. 94-186 effective January 1, 1997.

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