HomeMy WebLinkAboutResolutions - 2003.06.12 - 27187Miscellaneous Resolution #03146
BY: Commissioner Eric Coleman, District #23
RE: Board of Commissioners - Support for House Bill 4764 - Amendment to the
Business Corporation Act: Control Shares Acquisition
TO: Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS, in 1988, the state legislature enacted the Stacey, Bennett and Randall
Shareholder Equity Act (Public Act 58 of 1988), sometimes referred to as the Michigan
Control Shares Acquisition Act, to help Michigan public corporations hold off hostile
takeover attempts; and
WHEREAS, recent federal district court decisions and related litigation relative to
an attempted takeover of a large Michigan-based real estate investment trust, Taubman
Centers, Inc., by an Indianapolis-based REIT, the Simon Property Group, Inc. has initiated
Michigan legislation to address issues regarding corporate governance; and
WHEREAS, House Bill 4764 was introduced to amend the Business Corporation
Act as follows:
• Corporations whose board of directors are divided into classes (and have
staggered terms), shareholders could remove directors only for cause unless
the articles of incorporation allowed removal without cause. (Currently, the act
says shareholders can remove a director with or without cause unless the
articles limit removal for cause only.)
• Amendments to the articles of incorporation of a corporation with publicly
traded stock would have to be proposed to the shareholders by the board of
directors or by holders of shares representing three-quarters of each class of
the outstanding capital stock of the corporation.
• The bill would specify that the formation of a group does not constitute a
control share acquisition of shares of an issuing public corporation held by
members of the group.
• The acquisition act currently says that control shares acquired in a control
share acquisition have the same voting rights accorded the shares before the
acquisition only to the extent granted by a resolution approved by the
shareholders. The bill would allow the resolution to be approved by the
shareholders "or directors".
WHEREAS, HB 4764 restores the original legislative intent of the anti-takeover
provisions.
NOW THEREFORE BE IT RESOLVED THAT the Oakland County Board of
Commissioners hereby support House Bill 4764 and its proposed amendments to the
Business Corporation Act.
Commissioner I Commission&
District # District # Z 4L
.perso . - c. - e adoption of the foregoing Resolution. 5-
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missioner Eric Coleman
D'istribt #23
BE IT FURTHER RESOLVED THAT copies of this adopted resolution be forwarded
to the Governor of the State of Michigan, the House Committee on Commerce and Labor,
Representative Bill Huizenga, the Oakland County delegation to the state legislature, the
Michigan Association of Counties and Oakland County's legislative lobbyists.
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Resolution #03146 June 12, 2003
The Chairperson referred the resolution to the General Government Committee. There were no objections.