TITLE XXXVIII
SECURITIES
Chapter 421-A
DISCLOSURE OF SECURITY TAKEOVERS
Section 421-A:1
421-A:1 Short Title. –
This chapter shall be known as the Security Takeover Disclosure Act.
Source. 1977, 20:1, eff. Mar. 25, 1977.
Section 421-A:2
421-A:2 Definitions. –
In this chapter:
I. [Repealed.]
I-a. "Secretary of state" means the secretary of state or designee.
II. "Equity security" means any stock, bond, or other obligation of a corporation, the holder of which has the right to vote on any matter by virtue of the articles of incorporation, bylaws or governing instrument of such corporation or for the election of members of the board of directors of such corporation. "Equity security" includes any security convertible into equity security, and also includes any right, option or warrant to purchase an equity security.
III. "Offeree" means the beneficial or record owner of securities which an offeror acquires or offers to acquire in connection with a takeover bid.
IV. "Offeror" means a person who makes, or in any way participates or aids in making a takeover bid, and includes persons acting jointly or in concert, or who intend to exercise jointly or in concert any voting rights attached to the securities for which such takeover bid is made. An "offeror" does not include any bank, broker-dealer, attorney, accountant or consultant furnishing information or advice to an offeror and not otherwise participating in the takeover bid.
IV-a. "Department" means the department of state.
V. "Person" means an individual, corporation, association, partnership, trust or other entity.
VI. "Takeover bid" means the acquisition of, offer to acquire, or request or invitation for tenders of an equity security of a corporation organized under the laws of this state or having its principal place of business within this state or having its principal executive office within this state or which is the parent of a subsidiary incorporated under New Hampshire law, if after acquisition thereof the offeror would, directly or indirectly, be a record or beneficial owner of more than 5 percent of any class of the issued and outstanding equity securities of such corporation.
(a) "Takeover bid" does not include:
(1) An offer by or through a broker-dealer in the ordinary course of his business without solicitation of orders to sell equity securities of the target company;
(2) An offer to acquire such equity security solely in exchange for other securities, or the acquisition of such equity security pursuant to such offer, for the sole account of the offeror, in good faith and not for the purpose of avoiding this chapter, and not involving any public offering of such other securities within the meaning of Section 4 of Title I of the "Securities Act of 1933" (48 Stat. 77, 15 U.S.C. ยง 77d(2)), as amended;
(3) Any other offer to acquire an equity security, or the acquisition of such equity security pursuant to such offer, for the sole account of the offeror, from not more than 25 persons, in good faith and not for the purpose of avoiding this chapter;
(4) [Repealed.]
(5) An offer, if the acquisition by the offeror, in the instant transaction and in all acquisitions of equity securities of the same class during the preceding 12 months, does not exceed 2 percent of that class of outstanding equity securities of the target company;
(6) [Repealed.]
VII. "Target company" means a corporation whose securities are or are to be the subject of a takeover bid that has:
(a) One hundred or more shareholders;
(b) Its principal place of business, its principal office, or substantial assets within New Hampshire; and
(c) Either:
(1) More than 10 percent of its shareholders resident in New Hampshire;
(2) More than 10 percent of its shares owned by New Hampshire residents; or
(3) Ten thousand shareholders resident in New Hampshire.
Source. 1977, 20:1. 1983, 144:1, 2. 1987, 411:14, 15. 1988, 62:6, 7, 14; 207:1. 1991, 355:67, 68. 1992, 288:32, 33, eff. July 1, 1992.
Section 421-A:3
421-A:3 Requirement of Financial Disclosure. –
No offeror shall make a takeover bid unless as soon as practicable on the date of commencement of the takeover bid the offeror files with the secretary of state and the target company a registration statement containing the information required by RSA 421-A:4 and publicly discloses the material terms of the offer, including the total number and class of securities sought in the offer and the type and amount of consideration offered to security holders. The registration statement filed with the secretary of state shall be accompanied by such fees as may be prescribed under RSA 421-A:9. The offeror shall provide the target company with any amendments or revisions to the registration statement at the same time that such amendments or revisions are filed with the secretary of state.
Source. 1977, 20:1. 1983, 144:3. 1988, 62:13. 1991, 355:89, I. 1992, 288:31. 2003, 156:17, eff. Aug. 16, 2003.
Section 421-A:4
421-A:4 Contents of Registration Statement. –
The registration statement required to be filed pursuant to RSA 421-A:3 shall include:
I. Copies of all prospectuses, brochures, advertisements, circulars, letters or other matter by means of which the offeror proposes to disclose to offerees all information material to a decision to accept or reject the offer.
II. The identity and material background information of all persons on whose behalf the acquisition of any equity security of the target company has been or is to be effected, including, but not limited to:
(a) If the offeror is a corporation, complete information on the organization and operations of offeror, including without limitation the year of organization, form of organization, jurisdiction in which it is organized, a description of each class of the offeror's capital stock and of its long term debt, audited balance sheets and income statements for each of the 3 most recent fiscal years and, if the most recent balance sheet and income statement are for a period ending more than 90 days prior to the date of filing, an interim balance sheet and income statement covering the period from the date of the last audited balance sheet and income statement filed hereunder to a date within 90 days of the date of filing, an explanation of losses reflected in the required income statements, a brief description of the location and general character of the principal physical properties of the offeror and its subsidiaries, prior acquisitions, a description of threatened legal action, threatened legal proceedings, or pending legal proceedings, to which the offeror or any of its subsidiaries, officers, directors, or key personnel is or may be a party or of which any of their property is the subject, a brief description of the business done and projected by the offeror and its subsidiaries and the general development of such business over the past 5 years, a listing of all properties leased by the offeror, a listing of all intellectual property rights owned by the offeror, the number of employees of the offeror, the wages, salaries and other remuneration of the management of the offeror, the names of all directors, executive officers and key personnel, including principal and beneficial owners of greater than 10 percent of the offeror's stock, together with biographical summaries of each for the preceding 5 years, to date, and the approximate amount of any material interest, direct or indirect, of any of the directors or officers in any material transaction during the past 3 years, or in any proposed material transactions to which the offeror or any of its subsidiaries was or is to be a party.
(b) If the offeror is not a corporation, information concerning the background of the person, including:
(1) His or her current principal occupation and employment and the name, principal business, and address of any corporation or other organization in which the employment or occupation is conducted.
(2) Material business activities and affiliations during the past 3 years, giving the starting and ending dates of each and the name, principal business, and address of any corporation or other organization in which the occupation, position, office, employment, or affiliation was conducted.
(3) A description of any material pending legal or administrative proceeding in which he or she is a party.
III. The source and amount of all funds or other consideration, whether direct or indirect used or to be used in acquiring any equity security, including a statement describing any securities, other than the existing capital stock or long term debt of the offeror, which are being offered in exchange for the equity securities of the target company, and if any part of the acquisition price is or will be represented by borrowed funds or other consideration, a description of the material terms of any financing arrangements, including the names of the parties from whom the funds were borrowed, the term, the collateral, the stated and effective interest rates, and any other material terms or conditions of the loan. Any plans or arrangements to finance or repay the loan, or if no such plans or arrangements exist, shall be disclosed. Any alternative financing arrangements or alternative financing plans in the event the primary financing plans fall through, or the fact that no such arrangements or plans exist, shall be disclosed.
IV. A statement of any plans or proposals which the offeror, upon gaining control, may have to liquidate the target company, sell its assets, effect a merger or consolidation of it, or make any other major change in its business, corporate structure, management personnel, or policies of employment.
V. The number of shares of any equity security of the target company of which each offeror is beneficial or record owner or has a right to acquire, directly or indirectly, together with the name and address of each person defined in this chapter as an offeror.
VI. Particulars as to any contracts, arrangements or understandings to which an offeror is party with respect to any equity security of the target company, including, without limitation, transfers of any equity security, joint ventures, loans or option arrangements, puts and calls, guarantees of loan, guarantees against loss, guarantees of profits, division of losses or profits, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, or understandings have been entered into.
VII. A description of any court or governmental proceeding in which the offer has been disapproved or enjoined and of any pending court or governmental proceeding in which it is alleged that the offer does not comply with the provisions of the applicable laws or regulations.
VIII. A statement of which other tender offers, subject to section 13, clause (d) or proxy contests subject to section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a et seq.), as amended, the offeror has engaged in within 5 years prior to the offer.
IX. A statement of whether any officer or director of the offeror or the offeror has:
(a) Been convicted within the prior 10 years of a felony or within the prior 5 years in any other criminal proceeding, excluding traffic violations or similar misdemeanors. If the person was convicted, describe the criminal proceeding, including the dates, nature of conviction, name and location of the court, and the penalty imposed or other disposition in the case; or
(b) Been subject of a judgment, decree or final order, including a description of the proceeding with a summary of the terms of judgment, decree, or final order, entered by a court or governmental agency with respect to laws relating to:
(1) Antitrust,
(2) Fair employment practices,
(3) Purchase or sale of securities, or
(4) Environmental protection, or
(c) Been subject of a disciplinary action such as, but not limited to, a censure, reprimand, or warning, by a non-governmental body commonly known as a self-regulatory organization, or SRO, such as, but not limited to, the National Association of Securities Dealers, the New York Stock Exchange, or the American Stock Exchange.
X. A statement of risk factors related to the transaction for security holders of the target company.
XI. Such other and further documents, exhibits, data, and information as may be required by regulations of the secretary of state or as may be necessary to make fair, full, and effective disclosure to offerees of all information material to a decision to accept or reject the offer. If any material change occurs in the facts set forth in the registration statement required by RSA 421-A:3, the offeror who filed such statement shall promptly notify the secretary of state and the target company of such change and shall amend the registration statement to reflect such change within 10 days of the change.
Source. 1977, 20:1. 1988, 62:13. 1989, 21:1. 1991, 355:89, I. 1992, 288:31. 2003, 156:18, Aug. 16, 2003.
Section 421-A:5
421-A:5 Scheduling of Public Hearing. –
Within 20 days after the filing of a registration statement pursuant to this chapter, the secretary of state shall commence his investigation and order a hearing, if he determines a hearing is necessary or appropriate for the protection of offerees in this state, for the purpose of determining compliance with the requirements of this chapter and whether the offeror has provided full and fair disclosure to the offerees of all material information concerning the takeover bid including the filing of a complete and accurate registration statement. Any hearing shall include the offeror and the target company as parties, and shall commence within 25 days after the filing of a registration statement.
Source. 1977, 20:1. 1983, 144:4. 1988, 62:13. 1991, 355:89, I. 1992, 288:31. 2003, 156:19, eff. Aug. 16, 2003.
Section 421-A:6
421-A:6 Prohibition of Takeover Bid. –
I. In the event the secretary of state shall schedule a public hearing or hearings or otherwise conduct an investigation pursuant to RSA 421-A:5, the secretary of state shall issue an order prohibiting an offeror from making or continuing with any takeover bid. Every person shall comply with every such order.
II. Following completion of a hearing pursuant to RSA 421-A:5 or the conclusion of his investigation conducted pursuant to such section, but in no event later than 55 days after the filing of a registration statement, the secretary of state shall determine whether the requirements of this chapter have been met and shall issue an order containing his conclusions and the reasons therefor. If the requirements of this chapter have been met, such order shall authorize the making or continuation of the takeover bid. If the secretary of state finds the requirements of this chapter have not been met, he shall by order prohibit the making or continuation of any takeover bid until such time as full compliance has been accomplished.
Source. 1977, 20:1. 1983, 144:5. 1988, 62:13. 1991, 355:89, I. 1992, 288:31, eff. July 1, 1992.
Section 421-A:7
421-A:7 Tender and Withdrawal of Shares. –
I. Securities deposited pursuant to a tender offer or request or invitation for tenders may be withdrawn by an offeree or his attorney-in-fact by demand in writing to the offeror or the depository within 15 business days from the date of commencement of such offer.
II. If an offeror makes a tender offer or request or invitation for tenders for less than all the outstanding equity securities of any class and if the number of securities deposited or tendered pursuant to the offer is greater than the number the offeror has offered to accept and pay for, the securities deposited within 10 days of the date of commencement of such tender offer or request or invitation for tenders or within 10 days from the date that notice of an increase in the consideration offered is first published, sent or given to security holders shall be accepted pro rata, disregarding fractions, according to the number of securities deposited or tendered by each offeree.
III. If an offeror varies the term of a tender offer or request or invitation for tenders before its expiration date by increasing the consideration offered to the offerees, the offeror shall pay the increased consideration for all equity securities accepted, whether the securities have been accepted by the offeror before or after the variation in the terms of the offer.
IV. An offeror may not make a tender offer or request or invitation for tenders involving a target company which is not made to the holders of equity securities of the target company residing in the state on the same terms as such tender offer or request or invitation for tenders is made to holders of such securities not residing within this state.
Source. 1977, 20:1. 1983, 144:6, eff. Aug. 6, 1983.
Section 421-A:8
421-A:8 Fraudulent, Deceptive or Manipulative Practices. –
I. No person shall make any untrue statement of a material fact or fail to state any material fact necessary in order to make the statement made, in the light of the circumstances under which they are made, not misleading, nor engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation. Fraudulent, deceptive or manipulative acts or practices include without limitation those acts and practices prescribed by rules adopted by the secretary of state, pursuant to RSA 541-A, as necessary to carry out the provisions of this chapter.
II. No takeover bid shall be made unless this chapter has been complied with, and no offeror shall make a takeover offer until any administrative or injunctive proceeding brought by the secretary of state against the offeror for violation of this chapter has been finally adjudicated.
III. No offeror shall exercise the voting power of shares acquired after the filing of a registration statement (or without the filing of a registration statement when a registration statement is required) until the issuance of an order of the secretary of state pursuant to RSA 421-A:6.
Source. 1977, 20:1. 1987, 411:13. 1988, 62:8, 13. 1991, 355:89, I. 1992, 288:31, eff. July 1, 1992.
Section 421-A:9
421-A:9 Administration. –
I. This chapter shall be administered by the secretary of state and employees designated by him within the department. The secretary of state may adopt rules, pursuant to RSA 541-A, as necessary to carry out the purposes of this chapter.
II. The secretary of state may establish fees for the filing of any registration statement, not to exceed $2,500, to recover the costs of administering this chapter. Such fees may vary according to the maximum consideration payable by the offeror for the securities which are the subject of the takeover bid. Such fees shall not be refunded in the event a filing under this chapter is not approved for cause by the secretary of state.
Source. 1977, 20:1. 1983, 144:7. 1988, 62:9, 13. 1991, 355:89, I, 90. 1992, 288:31, eff. July 1, 1992.
Section 421-A:10
421-A:10 Designation of Secretary of State for Service. –
I. Every nonresident offeror, except a foreign corporation which has appointed and keeps a resident agent in this state, shall be deemed to have appointed the secretary of state as his agent upon whom may be served any lawful process, authorized by this chapter, with the same effect as though served upon the offeror personally.
II. Service of process pursuant to this section shall be accomplished by leaving a copy of the process in the office of the secretary of state, but it shall not be effective unless notice of the service and a copy of the process is sent by registered mail to the nonresident offeror served, at his last known address.
Source. 1977, 20:1, eff. Mar. 25, 1977.
Section 421-A:11
421-A:11 Enforcement. –
I. Whenever it appears to the secretary of state that any person has engaged in or is about to engage in any act or practice constituting a violation of this chapter, or any rule adopted or order issued under it, the secretary of state may issue and cause to be served upon any person violating any of the provisions of this chapter, an order requiring the person to cease and desist therefrom; and the secretary of state may bring an action in a court of competent jurisdiction to enjoin the acts or practices and to enforce compliance with this chapter or any rule adopted or order issued under it. Upon a proper showing, the court may grant a permanent or temporary injunction or restraining order and may order rescission of any sales or purchases of securities determined to be unlawful under this chapter, or any rule adopted or order issued under it. The court may not require the secretary of state to post a bond.
II. In any court proceedings, the attorney general may apply for and, on due showing, be entitled to have issued the court's subpoena requiring the appearance of any defendant and his employees or agents and the production of documents, books and records as may appear necessary for the hearing of the petition, and to testify and give evidence concerning the acts, conduct or things complained of in the action.
III. Whenever it appears that any person has engaged in or is about to engage in any act or practice constituting a violation of this chapter or any rule adopted or order issued under it, the offeror, target company or any record or beneficial owner of an equity security of the target company may bring an action in a court of competent jurisdiction to enjoin the acts or practices and to enforce compliance with the chapter or any rule adopted or order issued under it. Upon a proper showing, the court may grant a permanent or preliminary injunction or temporary restraining order or may order rescission of any sales, tenders for sale, purchases or tenders for purchase of equity securities determined to be unlawful under this chapter or any rule or order of the attorney general.
Source. 1977, 20:1. 1988, 62:10, 11, 13. 1991, 355:69, 89, I. 1992, 288:31, eff. July 1, 1992.
Section 421-A:12
421-A:12 Appeal to Superior Court. –
I. Any party aggrieved by a decision or final order of the secretary of state under RSA 421-A:6 or RSA 421-A:11 may appeal to the superior court by filing a petition within 20 days of the date of said decision or order, setting forth that such decision is illegal, unjust or unreasonable, in whole or in part, and specifying the grounds upon which the same is claimed to be illegal, unjust or unreasonable. A copy of such petition shall be served on the secretary of state.
II. Upon the filing of an appeal, the secretary of state shall transfer to the court the record of the proceeding before him and all papers on file in his department relating to or affecting such decision or order, or a certified copy thereof. The appeal shall be given precedence over other matters then pending in the court. The scope of review by the superior court shall be limited to questions of law. After hearing and upon consideration of the record, the court may affirm, vacate or modify, in whole or in part, the decision of the secretary of state, or may remand the same to the secretary of state for further findings. In the absence of a seasonable appeal, said decision and order shall be final.
III. An appeal does not suspend the operation of the order or decision from which the appeal is taken during the pendency of the appeal unless so ordered by the court. An appeal may be taken from the judgment of the court on any appeal as an appeal is otherwise taken in civil actions.
Source. 1977, 20:1. 1988, 62:13. 1991, 355:89, I, 90. 1992, 288:31, eff. July 1, 1992.
Section 421-A:13
421-A:13 Criminal Penalties. –
I. Any person who violates RSA 421-A:3 or any rule adopted under it, or any order of which he has notice, or who willfully violates RSA 421-A:7, 8 or 11 or any rule adopted or order issued thereunder, shall be guilty of a class B felony if a natural person, or guilty of a felony if any other person. Each of the acts specified shall constitute a separate offense and a prosecution or conviction for any of such offenses shall not bar prosecution or conviction for any other offense. No indictment or information may be returned more than 6 years after the alleged violation.
II. Nothing in this chapter shall be construed to limit the power of the state to punish any person for any conduct which constitutes a crime under any other statute.
Source. 1977, 20:1. 1988, 62:12. 1991, 355:70, eff. July 1, 1991.
Section 421-A:14
421-A:14 Civil Liability of Offeror for Violations. –
I. Any offeror who purchases a security in connection with a takeover offer in violation of this chapter shall be liable to the person selling the security to him, who may sue either at law or in equity. In an action for rescission the seller shall be entitled to recover the security, plus any income received by the purchasers thereon, upon tender of the consideration received. Tender requires only notice of willingness to pay the amount specified in exchange for the security. Any notice may be given by service as in civil actions or by certified mail to the last known address of the person liable. Damages shall be the amount by which either the value of the security on the date of purchase or its present value, whichever is greater, exceeds the present value of the consideration received for the security.
II. Every person who directly or indirectly controls a person liable under paragraph I of this section, every partner, principal executive officer or director of such person, every person occupying a similar status of performing similar functions, every employee of such person who materially aids in the act or transaction constituting the violation, and every broker-dealer or agent who materially aids in the act or transaction constituting the violation, is also liable jointly or severally with and to the same extent as such person, unless the person who would otherwise be so liable proves that he did not know, and, in the exercise of reasonable care, could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution, as in cases of contract, among the several persons so liable.
III. No action may be maintained under paragraph I of this section unless commenced before the expiration of 3 years after the act or transaction constituting the violation or the expiration of one year after the discovery of the facts constituting the violation, whichever first expires.
IV. The rights and remedies under this chapter are in addition to any other rights or remedies that may exist at law or in equity.
Source. 1977, 20:1, eff. Mar. 25, 1977.
Section 421-A:15
421-A:15 Exclusions. –
This chapter shall not apply when:
I. The offeror or the target company is a public utility or a public utility holding company as defined in section 2 of the "Public Utility Holding Company Act of 1935" (49 Stat. 803, 15 U.S.C. section 79 et seq.), as amended, and the takeover bid is subject to approval by the appropriate federal agency as provided in said act;
II. The offeror or the target company is a bank or a bank holding company subject to the "Bank Holding Company Act of 1956" (70 Stat. 133, 12 U.S.C. section 1841 et seq.), and subsequent amendments thereto, and the takeover bid is subject to approval by the appropriate federal agency as provided in said act;
III. The offeror or the target company is a savings and loan holding company as defined in section 2 of the "Savings and Loan Holding Company Amendments of 1967" (82 Stat. 5, 12 U.S.C. section 1730a), as amended, and the takeover bid is subject to approval by the appropriate federal agency as provided in said amendments;
IV. The offeror and the target company are banks and the offer is part of a merger transaction subject to approval by appropriate federal supervisory authorities;
V. The target companies are incorporated insurance agencies subject to regulation under Title XXXVII.
Source. 1977, 20:1. 1983, 144:8, eff. Aug. 6, 1983.
Section 421-A:16
421-A:16 Severability. –
If any provision of this chapter or the application of this chapter to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provisions or application; and, to this end, the provisions of this chapter are severable.
Source. 1983, 144:9, eff. Aug. 6, 1983.
Section 421-A:17
421-A:17 Reconciliation With Other Laws. –
If any provision of this chapter otherwise applicable to a takeover bid for a target company organized under the law of another jurisdiction is inconsistent with a provision of a statute regulating takeovers of such other jurisdiction such that either (a) compliance with the provision of such other law would be impossible or (b) the provision of this chapter would impose greater restrictions on the offeror, the target company, or shareholders of the target company with respect to such takeover bid, then such provision of this chapter shall be inapplicable to such takeover bid; provided, further, that the foregoing provisions of this section shall be inapplicable in the case of any provision of a statute of another jurisdiction if such provision of such statute, or such statute as a whole, has been held or declared unconstitutional under the United States Constitution or otherwise illegal or invalid by the highest court of such other jurisdiction or by a United States federal court having jurisdiction, which holding or declaration has not been reversed on reconsideration or appeal.
Source. 1987, 411:16, eff. May 26, 1987.