REGULATION OF TAKE–OVER BIDS IN THE ACQUISITION OF CORPORATIONS

M.G.L. pt. Part I, tit. Title XV, ch. c. 110C

in effect

M.G.L. c. 110C, § 1 Definitions

c. 110C, § 1. Definitions Section 1. As used in this chapter the following words shall, unless the context otherwise requires, have the following meanings:— ''Affiliate of an offeror'', any person controlling, controlled by, or under common control with an offeror. ''Associate of an offeror'', (1) Any corporation or other organization of which the offeror is an officer or partner or is, directly or indirectly, the beneficial owner of ten per cent or more of any class of equity securities; (2) Any person who is, directly or indirectly, the beneficial owner of ten per cent or more of any class of equity securities of the offeror; (3) Any trust or other estate in which the offeror has a substantial beneficial interest or as to which the offeror serves as a trustee or in a similar fiduciary capacity; and (4) Any relative or spouse of the offeror or any relative of such spouse who has the same home as the offeror. ''Equity security'', any shares or similar securities, or any securities convertible into such securities, or carrying any warrant or right to subscribe to or purchase such securities, or any such warrant or right, or any other security which, for the protection of security holders, is treated as an equity security pursuant to chapter one hundred and ten A. ''Offeree'', the beneficial or record owner of securities which an offeror acquires or offers to acquire in connection with a take-over bid. ''Offeror'', a person who makes, or in any way participates or aids in making, a take-over 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 take-over bid is made. ''Offeror'' does not include any bank or broker-dealer lending funds to an offeror in the ordinary course of its business, or any bank, broker-dealer, attorney, accountant, consultant, employee, or other person furnishing information or advice to, or performing ministerial duties for, an offeror, and not otherwise participating in the take-over bid. ''Person'', an individual, a corporation, a partnership, an association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security, or an unincorporated organization. ''Principal place of business'' of a corporation, the corporate headquarters where the general executive offices are located and from which the corporation's activities are controlled and directed by executive officers of the corporation. ''Secretary'', the state secretary. ''Take-over bid'', the acquisition of or offer to acquire, whether by a formal public announcement, by a tender offer or request or invitation for tenders, by the accumulation of stock in the market or the solicitation of particular shareholders, or otherwise any equity security of a target company if, after acquisition thereof, the offeror and the associates and affiliates of the offeror would be directly or indirectly the beneficial owners of more than ten per cent of any class of the issued and outstanding equity securities of such target company. In determining whether a person is directly or indirectly a beneficial owner of equity securities of any class, such person shall be deemed to be the beneficial owner of equity securities of such class which such person has the right to acquire through the exercise of presently exercisable options, warrants, or rights or through the conversion of presently convertible securities or otherwise. The equity securities subject to such options, warrants, rights, or conversion privileges held by a person shall be deemed to be outstanding for the purpose of computing the percentage of outstanding equity securities of the class owned by such person but shall not be deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. A take-over bid does not include: (1) A bid made by a dealer for his own account in the ordinary course of his business of buying and selling such security in which the dealer does not solicit or arrange for the solicitation of offers to sell shares; (2) An offer to acquire such equity security for consideration consisting primarily of securities covered by a current prospectus forming a part of a registration statement which has become effective under 15 USC § 77a et seq.; (3) An offer made by an offeror to acquire its own securities or securities of a subsidiary, at least two-thirds of the voting securities of which subsidiary are owned beneficially by the offeror; (4) Any take-over bid to which the target company consents, by action of its board of directors, if such board of directors has recommended acceptance thereof to shareholders and the terms thereof, including any inducements to officers or directors which are not made available to all shareholders, have been furnished to shareholders; (5) An offer which, if accepted by all offerees, shall not result in the offeror having acquired more that two per cent of the same class of equity securities of the issuer within the preceding twelve-month period; or (6) An offer to acquire equity securities of any corporation if the total number of the beneficial owners of all of the classes of the equity securities of such corporation shall be less than twenty-five persons. ''Target company'', a corporation, organized under the laws of or having its principal place of business in the commonwealth, whose securities are or are to be the subject of a take-over bid.

M.G.L. c. 110C, § 2 Disclosure of terms of take-over bid; filing; hearing

c. 110C, § 2. Disclosure of terms of take-over bid; filing; hearing Section 2. No offeror shall make a take-over bid unless he announces publicly the terms of the proposed take-over bid, files with the secretary and the target company, on the date of the commencement of the take-over bid, copies of all information required by section four, and pays the secretary a filing fee of one thousand dollars to defray the costs of any investigation the secretary may make in connection therewith. Within five days following such filing, or after a request made by the target company or an offeree within said five days, the secretary may order a hearing within ten days following such filing if he determines it necessary or appropriate for the protection of offerees in the commonwealth. If no such hearing is ordered within said ten days or a hearing is so ordered within such time and after hearing the secretary adjudicates that the take-over bid is not in violation of this chapter and that effective provision is made for fair and full disclosure to offerees of all information material to a decision to accept or reject the offer, the take-over bid shall be deemed to be in compliance with this chapter. If the secretary finds that the take-over bid would comply with provisions of this chapter if amended in certain respects, the take-over bid shall be deemed to be in compliance with this chapter only if so amended.

M.G.L. c. 110C, § 3 Acquisition of target company stock by offeror prior to take-over bid; disclosure requirements

c. 110C, § 3. Acquisition of target company stock by offeror prior to take-over bid; disclosure requirements Section 3. No offeror shall make a take-over bid if he and his associates and affiliates are directly or indirectly the beneficial owners of five per cent or more of the issued and outstanding equity securities of any class of the target company, any of which were purchased within one year before the proposed take-over bid, and the offeror, before making any such purchase, or before the thirtieth day following the effective date of this section, whichever is later, failed to publicly announce his intention to gain control of the target company, or otherwise failed to make fair, full, and effective disclosure of such intention to the persons from whom he acquired such securities.

M.G.L. c. 110C, § 4 Information required to be filed

c. 110C, § 4. Information required to be filed Section 4. The information to be filed by the offeror with the secretary and the target company pursuant to section two shall include:— 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; The identity and background of all persons on whose behalf the acquisition of any equity security of the target company has been or is to be effected; The source and amount of funds or other consideration 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 and the names of the parties from whom the funds were borrowed; 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; The number of shares of any equity security of the target company of which each offeror or an affiliate or an associate of 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 section as an offeror; 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, loan 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; 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 three most recent fiscal years and if the most recent balance sheet and income statement are for a period ended more than ninety 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 ninety days of the date of filing, a brief description of the location and general character of the principal physical properties of the offeror and its subsidiaries, a description of pending legal proceedings other than routine litigation to which the offeror or any of its subsidiaries is 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 five years, the names of all directors and executive officers together with biographical summaries of each for the preceding five 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 three years, or in any proposed material transactions to which the offeror or any of its subsidiaries was or is to be a party; 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; 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. 78a, et seq., as amended, the offeror has engaged in within five years prior to the offer; A statement of whether any officer or director of the offeror or the offeror has (1) been convicted within the prior ten years of a felony, or (2) been subject of a judgment or decree entered by a court or governmental agency with respect to laws relating to (a) anti-trust, (b) fair employment practices, (c) purchase or sale of securities, or (d) environmental protection; and Such other and further documents, exhibits, data, and information as may be required by regulations of the secretary 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. In connection with any take-over bid which is subject to federal law, the secretary may permit any offeror to file any document, schedule or statement required to be filed with the appropriate federal agency in lieu of the information required by this section, with such additions or modifications as the secretary may prescribe.

M.G.L. c. 110C, § 5 Time for filing or delivering copies of solicitation materials

c. 110C, § 5. Time for filing or delivering copies of solicitation materials Section 5. Copies of all advertisements, circulars, letters or other solicitation materials published by the offeror or the target company on or after the date that the take-over bid may be made in accordance with section two shall be filed with the secretary and delivered by the target company, or the offeror, as the case may be, to the other of them on the date that the same are first published or used or sent to offerees.

M.G.L. c. 110C, § 6 Hearings and adjudications; time; deposits for costs; findings

c. 110C, § 6. Hearings and adjudications; time; deposits for costs; findings Section 6. Any hearing pursuant to this section shall be commenced within twenty days of the date a filing is made pursuant to section two. Adjudications made pursuant to this section shall be made within forty-five days after such filing and pursuant to section four hundred and twelve of chapter one hundred and ten A. Upon filing an application with the secretary for a hearing under this section, the target company shall pay to the secretary a fee of two hundred and fifty dollars, and shall deposit with the secretary such sum, not exceeding seven hundred and fifty dollars, as the secretary may require to defray the costs of such hearing and any investigation which the secretary may make in connection therewith. If, after hearing, the secretary finds that the take-over bid is in violation of this chapter or that effective provision is not made for fair and full disclosure to offerees of all information material to a decision to accept or reject the offer, he shall so adjudicate. If he finds that the take-over bid would comply with this chapter if amended in certain respects, he shall so adjudicate. If he finds that the take-over bid is not in violation of this chapter and that effective provision is made for fair and full disclosure to offerees of all information material to a decision to accept or reject the offer, he shall so adjudicate.

M.G.L. c. 110C, § 7 Unlawful practices; rights of resident shareholders; increasing terms of bid; minimum time of bid; withdrawal of deposited securities

c. 110C, § 7. Unlawful practices; rights of resident shareholders; increasing terms of bid; minimum time of bid; withdrawal of deposited securities Section 7. It is unlawful for any offeror or target company or any affiliate or associate of an offeror or target company or any broker-dealer acting in behalf of an offeror or target company to make any untrue statement of a material fact or to conceal any material fact in order to make the statements misleading, or to engage in any fraudulent, evasive, deceptive, manipulative or grossly unfair practices in connection with a take-over bid. No take-over bid shall be made unless it is made under the provisions of this chapter, and no offeror shall make a take-over bid which is not made to all holders residing in the commonwealth of the equity security that is the subject of such take-over bid, or which is not made to such holders on the same terms as such take-over bid is made to holders of such equity security not residing within the commonwealth. If a take-over bid is made for less than all the outstanding equity securities of any class and if the number of securities deposited pursuant thereto is greater than the number the offeror has agreed to accept, the offeror shall take up and pay for the securities pro-rata, disregarding fractions, according to the number of securities deposited by each offeree. If the terms of a take-over bid are changed before its expiration by increasing the consideration offered to offerees, the offeror shall pay the increased consideration for all equity securities taken up, whether the same are deposited or taken up before or after the change in the terms of the take-over bid. No offeror shall make a take-over bid which does not remain open for at least fifteen days after it is deemed to be in compliance with this chapter with the right to extend such period; purchase any shares pursuant to a take-over bid prior to the expiration of such fifteen day period; offer to pay an offeree a fee, commission or any other consideration not offered to all offerees; or publish or use in connection with the offer any false statement of a material fact or conceal a material fact in order to make the statement misleading. Securities deposited pursuant to a take-over bid may be withdrawn by an offeree or his attorney-in-fact by demand in writing to the offeror or the depository at any time up to five days prior to the announced termination date of the offer.

M.G.L. c. 110C, § 8 Banking or public utility corporations; copies of filed material furnished to regulatory body

c. 110C, § 8. Banking or public utility corporations; copies of filed material furnished to regulatory body Section 8. If the offeror or the target company is a banking corporation subject to regulation by the commissioner of banks, or a public utility corporation subject to regulation by the department of public utilities or the department of telecommunications and cable, the secretary shall forthwith, upon receipt of the filing required under section two, furnish a copy of such filing to the regulatory body having jurisdiction over the offeror or target company.

M.G.L. c. 110C, § 9 Civil liability of violators; rights and remedies; criminal provisions; injunctions

c. 110C, § 9. Civil liability of violators; rights and remedies; criminal provisions; injunctions Section 9. (a) Any offeror who purchases a security in connection with a take-over 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 purchaser 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 are the excess of either the value of the security on the date of purchase or its present value, whichever is greater, over the present value of the consideration received for the security. (b) Every associate and affiliate of a person liable under paragraph (a), every partner, principal executive officer or director of such person, every person occupying a similar status or 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 is contribution as in cases of contract among the several persons so liable. (c) No action may be maintained under paragraph (a) or (b) unless commenced before the expiration of three 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. (d) The rights and remedies under this chapter are in addition to any other rights or remedies that may exist at law or in equity. (e) Whenever it appears to the secretary that any person has engaged or is about to engage in any act or practice constituting a violation of this chapter, or any rule or order hereunder, (1) he may issue and cause to be served upon any person violating any of the provisions of this chapter, an order requiring the person guilty thereof to cease and desist therefrom; and (2) he may bring an action in the superior court division of the appropriate county to enjoin the acts or practices and to enforce compliance with this chapter, or any rule or order hereunder, or he may refer the matter to the attorney general or the district attorney of the appropriate county. (f) Any person, who violates section two or any rule thereunder, or any order of which he has notice, or who willfully violates section seven or any rule or order thereunder, may be fined not more than five thousand dollars or imprisoned for not more than three years or both. Each of the acts specified shall constitute a separate offense and a prosecution or conviction for any one of such offenses shall not bar prosecution or conviction for any other offense. No indictment or information may be returned under sections two and seven more than six years after the alleged violation. (g) The secretary may refer such evidence as is available concerning violations of this chapter or of any rule or order hereunder to the attorney general or the district attorney of the appropriate county who may, with or without any reference, institute the appropriate criminal proceedings under this chapter. If referred to a district attorney, he shall within ninety days file with the secretary a statement concerning any action taken or, if no action has been taken, the reasons therefor. (h) Nothing in this chapter limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute. (i) Whenever any person has engaged or is about to engage in any act or practice constituting a violation of this chapter or any rule or order hereunder, the offeror, target company or any offeree may bring an action in the superior court division of the appropriate county to enjoin that person from continuing or doing any act in violation of this chapter. (j) Upon an appropriate showing in any action brought under paragraph (e) or (i), 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 or order hereunder.

M.G.L. c. 110C, § 10 Rules and regulations; promulgation; waiver of jurisdiction; delegation of authority

c. 110C, § 10. Rules and regulations; promulgation; waiver of jurisdiction; delegation of authority Section 10. (a) The secretary may, pursuant to section four hundred and twelve of chapter one hundred and ten A prescribe reasonable rules and regulations or issue orders with respect to particular situations: (1) Defining any terms used in this chapter including fraudulent, evasive, deceptive, manipulative or grossly unfair practices in connection with take-over bids. (2) Exempting from this chapter take-over bids not made for the purpose of, and not having the effect of, changing or influencing the control of a target company. (3) Covering such other matters as are necessary to give effect to this chapter. (4) Waiving jurisdiction over a take-over bid if he determines that: (i) the take-over bid is subject to the jurisdiction of another state having a statute or regulation similar in purpose and effect to this chapter; (ii) information similar to that specified in section four is required to be filed with the administrator of such other state; (iii) such other state has a greater interest in regulating the take-over bid than the commonwealth, and (iv) the purpose of this chapter will be accomplished and the public interest will be better served by such waiver. (b) The secretary may delegate to the director of securities the authority to perform any duty and exercise any power assigned to the secretary under the provisions of this chapter.

M.G.L. c. 110C, § 11 Insurance companies; duties of commissioner of insurance

c. 110C, § 11. Insurance companies; duties of commissioner of insurance Section 11. If the offeror or a target company is an insurance company subject to regulation under chapter one hundred and seventy-five to chapter one hundred and seventy-five C, inclusive, the commissioner of insurance shall for all purposes of this section be substituted for the secretary. This section shall not be construed to limit or modify in any way any responsibility, authority, power, or jurisdiction of the secretary or the commissioner of insurance pursuant to any other provisions of law.

M.G.L. c. 110C, § 12 Exemptions from chapter

c. 110C, § 12. Exemptions from chapter Section 12. This chapter does not apply when:— (a) The offeror or the target company is a public utility or a public utility holding company as defined in section two of the ''Public Utility Holding Company Act of 1935'', 15 U.S.C. 79, as amended, and the take-over bid is subject to approval by the appropriate federal agency as provided in such act; (b) The offeror or the target company is a bank or a bank holding company subject to the ''Bank Holding Company Act of 1956'', 12 U.S.C. 1841, as amended, and the take-over bid is subject to approval by the appropriate federal agency as provided in such act; (c) The offeror or the target company is a savings and loan holding company as defined in section two of the ''Savings and Loan Holding Company Amendments of 1967'', 12 U.S.C. 1730A, as amended, and the take-over bid is subject to approval by the appropriate federal agency as provided in such act; (d) 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.

M.G.L. c. 110C, § 13 Severability

c. 110C, § 13. Severability Section 13. The provisions of this chapter are severable and if any such provision or the application of such provision to any person or circumstances shall be held to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any of the remaining provisions of this chapter or the application of such provision to said person or circumstances.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter110CFetched: 10/20/2026

REGULATION OF TAKE&ndash;OVER BIDS IN THE ACQUISITION OF CORPORATIONS