LAW GOVERNING CONTROL SHARE VOTING RIGHTS

After a control share acquisition occurs, control shares of the acquiring person have only such voting rights as are conferred by this section.

1. Subject to the provisions of paragraphs 2 through 4 of this section, the voting power of control shares having voting power of one-fifth (1/5) or more of all voting power is reduced to zero unless the shareholders of the issuing public corporation approve a resolution pursuant to the procedure set forth in Section 1153 of this title according the shares the same voting rights as they had before they became control shares.

2. Except as provided in subsection A of Section 1153 of this title, the voting power of control shares representing voting power of less than one-fifth (1/5) of all voting power is not affected by Sections 1145 through 1155 of this title.

3. If control shares of the acquiring person previously have been accorded, pursuant to the procedure set forth in Section 1153 of this title, the same voting rights they had before they became control shares, or if such control shares were acquired in a transaction excluded from the definition of "control share acquisition", then only the voting power of control shares acquired in a subsequent control share acquisition by such acquiring person within a higher range of voting power shall be reduced to zero.

4. The voting rights of control shares are restored to those accorded such shares prior to the control share acquisition in any of the following circumstances:

(a)if, by reason of subsequent issuances of shares or other transactions by the issuing public corporation, the voting power of those control shares is reduced to a range of voting power for which approval has been granted or is not required; or

(b)upon transfer to a person other than an acquiring person; or

(c)the expiration of three (3) years after the date of a vote of shareholders, pursuant to Section 1153 of this title, failing to approve the resolution according voting rights to those control shares.

Added by Laws 1987, c. 146, § 19, emerg. eff. June 24, 1987. Amended by Laws 1990, c. 328, § 10, eff. Sept. 1, 1990; Laws 1991, c. 53, § 8, eff. Sept. 1, 1991.