Miss. Code Ann. § 79-25-1 Short title.
This chapter may be cited as the “Mississippi Shareholder Protection Act”.
Mississippi Shareholder Protection Act
Miss. Code Ann. tit. 79, ch. 25
in effectMiss. Code Ann. § 79-25-3 Definitions.
In Sections 79-25-3 through 79-25-9, the following terms have the meanings ascribed herein:
“Affiliate,” including the term “affiliated person,” means a person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person.
“Announcement date” means the first general public announcement of the proposal or intention to make a proposal of a business combination or its first communication generally to shareholders of the corporation, whichever is earlier.
“Associate,” when used to indicate a relationship with any person, means:
Any corporation or organization (other than the corporation or a subsidiary of the corporation) of which such person is an officer, director or partner, or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities;
Any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and
Any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the corporation or any of its affiliates.
“Beneficial owner,” when used with respect to any voting stock, means a person:
That, individually or with any of its affiliates or associates, beneficially owns voting stock, directly or indirectly; or
That, individually or with any of its affiliates or associates, has:
The right to acquire voting stock (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; or
The right to vote voting stock pursuant to any agreement, arrangement or understanding; or
That has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting, exercising investment power over, or disposing of voting stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such shares of voting stock.
“Business combination” means:
Subject to the limitations provided in Sections 79-33-1 through 79-33-9, unless the merger, consolidation or share exchange does not alter the contract rights of the stock as expressly set forth in the certificate of incorporation or change or convert in whole or in part any of the outstanding shares of stock of the corporation, any merger, consolidation, share exchange or similar transaction of the corporation or any subsidiary with any interested shareholder or any other corporation (whether or not itself an interested shareholder) which is, or after the merger, consolidation or share exchange would be, an affiliate of an interested shareholder that was an interested shareholder prior to the transaction; or
Any sale, lease, transfer or other disposition, other than in the ordinary course of business, in one transaction or a series of transactions, to or with any interested shareholder or any affiliate of any interested shareholder (other than the corporation or any of its subsidiaries) of any assets of the corporation or any subsidiary having, at the time the transactions are approved by the board of directors of the corporation, an aggregate market value of twenty percent (20%) or more of the total market value of the outstanding stock of the corporation or of its assets, all as of the end of its most recently ended fiscal quarter, whichever is lower; or
The issuance or transfer by the corporation, or any subsidiary (in one transaction or a series of transactions) of any securities of the corporation or any subsidiary which have an aggregate market value of five percent (5%) or more of the total market value of the outstanding stock of the corporation to any interested shareholder or any affiliate of any interested shareholder (other than the corporation or any of its subsidiaries), except pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the corporation’s voting stock or any other method affording substantially equal treatment to the holders of voting stock; or
The adoption of any plan or proposal for the liquidation, dissolution of or similar transaction involving the corporation in which anything other than cash will be received by an interested shareholder or any affiliate or any interested shareholder; or
Any reclassification of securities (including any reverse stock split), or recapitalization of the corporation, or any merger, consolidation or share exchange of the corporation with any of its subsidiaries which has the effect, directly or indirectly, in one transaction or a series of transactions, of increasing by five percent (5%) or more of the total number of outstanding shares, the proportionate share of the outstanding shares of any class of equity securities of the corporation or any subsidiary which is directly or indirectly owned by any interested shareholder or any affiliate or associate of any interested shareholder, except as a result of immaterial changes due to fractional share adjustments.
“Common stock” means any stock other than preferred or preference stock.
“Continuing director” means any member of the board of directors of the corporation, while such person is a member of the board of directors, who is not an affiliate or associate or representative of the interested shareholder and was a member of the board of directors prior to the time that the interested shareholder became an interested shareholder, and any successor of a continuing director, while such successor is a member of the board of directors, who is not an affiliate or associate or representative of the interested shareholder and is recommended or elected to succeed the continuing director by a majority of continuing directors.
“Control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly, indirectly or beneficially, of the power, directly or indirectly, to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. The beneficial ownership of ten percent (10%) or more of the votes entitled to be cast by a corporation’s voting stock creates a presumption of control.
“Corporation,” means any domestic corporation, as defined in Section 79-3-3(a), Mississippi Code of 1972, which corporation’s principal place of business is located in Mississippi or which corporation has substantial assets in Mississippi, provided that such corporation has securities listed on a securities exchange registered under the Securities Exchange Act of 1934.
A corporation shall not include:
Any state or national bank or any bank holding company or any affiliate thereof authorized by the appropriate regulatory authority to be owned by any of the above; or
Any state or federal savings and loan association, savings bank or similar savings institution, and any holding company or other affiliate of any state or federal savings and loan association, savings bank or similar savings institution.
“Determination date” means the date on which an interested shareholder first became an interested shareholder.
“Equity security” or “security” means:
Any stock or similar security, certificate of interest, or participation in any profit sharing agreement, voting trust certificate, or certificate of deposit for an equity security;
Any security convertible, with or without consideration, into an equity security, or any warrant or other security carrying any right to subscribe to or purchase an equity security; or
Any put, call, straddle or other option or privilege of buying an equity security from or selling an equity security to another without being bound to do so.
“Interested shareholder” means any person or associated group of persons acting in concert (other than the corporation and/or any subsidiaries) that:
Is the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the outstanding voting stock of the corporation; or
Is an affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the then outstanding voting stock of the corporation.
For the purpose of determining whether a person or group of persons is an interested shareholder, the number of shares of voting stock deemed to be outstanding shall include shares deemed owned by the person or group of persons through application of paragraph (d) of this subsection.
“Market value” means:
In the case of stock, the highest closing sale price during the thirty-day period immediately preceding the date in question of a share of such stock on the composite tape for New York Exchange listed stocks, or, if such stock is not quoted on the composite tape, on the New York Stock Exchange, or if such stock is not listed on such exchange, on the principal United States Securities Exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the thirty-day period preceding the date in question on the National Association of Securities Dealers, Inc., automated quotations system or any system then in use.
In the case of property other than cash or stock, the fair market value of such property on the date in question as determined by a majority of the continuing directors of the corporation in good faith.
“Subsidiary” means any corporation of which voting stock having a majority of the voting stock is owned, directly or indirectly, by the corporation.
“Valuation date” means:
For a business combination voted upon or consented to by shareholders, the latter of the day prior to the date of the shareholders vote or consent or the day twenty (20) days prior to the consummation of the business combination; and
For a business combination not voted upon or consented to by shareholders, the date of the consummation of the business combination.
“Voting stock” means shares of capital stock of the corporation entitled to vote generally in the election of directors.
Miss. Code Ann. § 79-25-5 Voting requirements.
In addition to any vote otherwise required by law, by the certificate of incorporation of the corporation, or by the bylaws of the corporation, a business combination shall be approved by the affirmative vote of at least:
Eighty percent (80%) of the votes entitled to be cast by outstanding shares of voting stock of the corporation, voting together as a single class; and
Two-thirds (2/3) of the votes entitled to be cast by holders of voting stock other than voting stock held by the interested shareholder who is (or whose affiliate or associate is) a party to the business combination or an affiliate or associate of the interested shareholder, voting together as a single class.
Miss. Code Ann. § 79-25-7 Exceptions to voting requirements.
The provisions of Section 79-25-5 shall not apply to a business combination involving receipt of consideration in exchange for or in respect of the corporation’s stock or assets in the circumstances specified in subsection (b) or (c) of this section or to a corporation meeting one (1) of the requirements of subsection (d) of this section.
The vote required by Section 79-25-5 is not required if each of the following conditions is met:
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 in such business combination is at least equal to the highest of the following:
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
Within the two-year period immediately prior to the announcement date of the proposal of the business combination, or In the transaction in which it became an interested shareholder, whichever is higher; or
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
The price per share equal to the market value per share of common stock of the same class or series determined pursuant to subsection (b)(i)(B) of this section, multiplied by the fraction of:
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 within the two-year period prior to the announcement date; over
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 stockholder acquired his stock.
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 (whether or not the interested shareholder has previously acquired any shares of a particular class or series of stock):
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 of stock acquired by it
Within the two-year period immediately prior to the announcement date of the proposal of the business combination, or
In the transaction in which it became an interested shareholder, whichever is higher; or
The highest preferential amount per share to which the holders of shares of such class of stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; or
The market value per share of such class of stock on the announcement date or on the determination date, whichever is higher; or
The price per share equal to the market value per share of such class of stock determined pursuant to subsection (b)(ii)(c) of this section, multiplied by the fraction of:
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 of voting stock acquired by it within the two-year period immediately prior to the announcement date; over
The market value per share of the same class of voting stock on the first day in such two-year period on which the interested shareholder acquired any shares of the same class of voting stock.
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 of stock with varying forms of consideration, the form of consideration for such class 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. In making any price calculation under subsection (a) of this section, appropriate adjustments shall be made to reflect any reclassification, stock dividend, stock split, recapitalization or similar transaction which may increase or reduce the number of outstanding shares of any class or series of stock of the corporation.
After the interested shareholder has become an interested shareholder and prior to the consummation of such business combination:
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.
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 of the corporation (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, stock dividend, stock split, recapitalization, reorganization or any similar transaction, which has the effect of reducing the number of outstanding shares of the stock.
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.
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, guarantees, 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.
Whether or not such business combinations are consummated in whole or in part after July 1, 1985, or after the interested shareholder became an interested shareholder, the requirements of Section 79-25-5, do not apply to business combinations that specifically, generally, or generally by types, as to specifically identified or unidentified existing or future interested stockholders or their affiliates, have been approved or exempted therefrom by resolution approved by at least eighty percent (80%) of the continuing directors of the corporation.
Unless the certificate of incorporation of the corporation provides otherwise, the requirements of subsection (2) of this section do not apply to any business combination of:
A corporation having fewer than five hundred (500) beneficial owners of its stock; or
A corporation which elects not to be governed by the requirements of Section 79-25-5 by the adoption, upon a majority vote of its shareholders, of an amendment to its certificate of incorporation within one (1) year from and after July 1, 1985, for existing corporations, or within one (1) year from and after the date of incorporation for corporations organized after July 1, 1985; or
An investment company registered under the Investment Company Act of 1940; or
Any state or national bank or any bank holding company or any affiliate thereof authorized by the appropriate regulatory authority to be owned by any of the above; or
Any state or federal savings and loan association, savings bank or similar savings institution, and any holding company or other affiliate of any state or federal savings and loan association, savings bank or similar savings institution.
Miss. Code Ann. § 79-25-9 Severability.
In the event that any portion or provision of the Mississippi Shareholder Protection Act (Sections 79-25-1 et seq.) is void, invalid, invalidated or otherwise found to be unenforceable for any reason, such portion or provision shall be deleted from the act and each and all of the remaining portions or provisions of the act shall remain effective, and the act shall be interpreted as if the void, invalid or unenforceable portion or provision never existed.
Source: Public.Resource.Org MS CodeURL: https://unicourt.github.io/cic-code-ms/transforms/ms/ocms/r78/gov.ms.code.title.79.htmlFetched: 10/18/2026