COMMENT

Source: Former Section 14-2-233.

See the general comment regarding Part 2 which follows Section 14-2-1110.

This section sets forth the director and shareholder voting requirements which must be met in order for a business combination to avoid the necessity of compliance with the fair pricing and procedural requirements contained in Section 14-2-1112. The concept of the "continuing director" is adopted from Ky. Rev. Stat. § 271A.396(6). The requisite approval of the continuing directors is designed to assure that business transactions between the corporation and major shareholders are approved by directors who have no affiliation with the major shareholder.

The voting requirements contained in this section are in addition to any vote required by Georgia law or the articles of incorporation or bylaws of a corporation. For example, if a corporation's articles of incorporation require the approval of the holders of two-thirds of the shares for a merger, such vote would still be required before the merger could proceed. Such two-thirds vote, however, would not allow the proposed purchaser to avoid the fair pricing and procedural requirements of Section 14-2-1112 absent the approval of the continuing directors and/or the shareholders other than the interested shareholder as required by this section.

The last phrase of this section makes clear that the group of shareholders to be considered in determining whether the two-thirds approval has been received shall include any interested shareholders other than the interested shareholder(s) who is party to the proposed business combination.

Further restrictions on business combinations may be imposed by corporations electing to be governed by Article 11A of this Code.

Cross-References Approval of asset sales by shareholders, see § 14-2-1202. Approval of mergers and share exchanges by shareholders, see § 14-2-1103. Business combinations involving resident domestic corporations, see Article 11A. Bylaws increasing quorum or voting requirements for directors, see § 14-2-1022. Bylaws increasing quorum or voting requirements for shareholders generally, see § 14-2-1021. Greater quorum or voting requirements for voting by shareholders, see § 14-2-727. Mergers, see Article 11. Mergers, action on plan, see § 14-2-1103. Quorum and voting requirements for directors, see § 14-2-824. Quorum and voting requirements for voting groups, see § 14-2-725. Recapitalization, voting rights of groups, see § 14-2-1004. Reclassification, voting rights of groups, see § 14-2-1004. Sales of assets, see Article 12. Sales of assets, action on plan, see § 14-2-1202. Share exchanges, see Article 11. Share exchanges, action on plan, see § 14-2-1103. Voting shares, see § 14-2-721.