(a) Unless the certificate of incorporation provides otherwise, a sale, lease, exchange or other disposition of assets, other than a disposition described in section 33-1165, requires approval of the corporation's members who are otherwise entitled to vote on the disposition, if any, only if the disposition would leave the corporation without a significant continuing activity. If a corporation retains an activity that represented at least twenty-five per cent of total assets at the end of the most recently completed fiscal year, and twenty-five per cent of either income from continuing operations before taxes or revenues from continuing operations for such fiscal year, for the corporation and each of its subsidiaries on a consolidated basis, the corporation will conclusively be deemed to have retained a significant continuing activity.

(b) A disposition that requires approval of the members under subsection (a) of this section shall be initiated by a resolution of the board of directors authorizing the disposition. After adoption of such a resolution, the board of directors shall submit the proposed disposition to the members for their approval. The board of directors shall also transmit to the members a recommendation that the members approve the proposed disposition, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall transmit to the members the basis for that determination.

(c) The board of directors may condition its submission of a disposition to the members under subsection (b) of this section on any basis.

(d) If a disposition is to be approved by the members under subsection (a) of this section, and if the approval is to be given at a meeting, the corporation shall notify each member entitled to vote on the disposition, if any, of the meeting of members at which the disposition is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the disposition and shall contain or be accompanied by a description of the disposition, including the terms and conditions thereof and the consideration to be received by the corporation therefor.

(e) Unless sections 33-1000 to 33-1290, inclusive, the certificate of incorporation or the board of directors, acting pursuant to subsection (c) of this section, requires a greater vote or a vote by classes of members, the disposition to be authorized must be approved by: (1) If no class of members is entitled to vote separately on the disposition as a class, at least two-thirds of the votes cast by the members entitled to vote thereon, and (2) if any class of members is entitled to vote on the disposition separately as a class, at least two-thirds of the votes cast by the members of each such class. Approval of the disposition by members may precede or follow authorization of the disposition by the board of directors and the taking of any necessary actions under subsection (b) of this section.

(f) After a disposition has been approved by the members under subsection (b) of this section, and at any time before the disposition has been consummated, the disposition may be abandoned by the corporation without action by the members, subject to any contractual rights of other parties to the disposition.

(g) A disposition of assets in the course of dissolution under sections 33-1170 to 33-1193, inclusive, is not governed by this section.

(h) The assets of a direct or indirect consolidated subsidiary shall be deemed the assets of the parent corporation for the purposes of this section.

(i) If the corporation has no members, or no members entitled to vote thereon, a disposition described in this section shall be approved by the board of directors.

(P.A. 96-256, S. 114, 209; P.A. 97-246, S. 92, 99; P.A. 03-18, S. 48.)

History: P.A. 96-256 effective January 1, 1997; P.A. 97-246 amended Subsec. (d) to make a technical change, effective June 27, 1997; P.A. 03-18 amended Subsec. (a) by replacing former provisions with provisions re member approval of sale or other disposition of assets that leaves corporation without a significant continuing activity, amended Subsec. (b) by replacing former provisions with provisions re actions of board of directors, amended Subsec. (c) by replacing “the proposed transaction” with “a disposition to the members under subsection (b) of this section”, amended Subsec. (d) by adding provision re disposition to be approved by the members at a meeting, replacing references to “transaction” and “sale, lease, exchange or other disposition of all, or substantially all, of the property of the corporation” with references to “disposition”, replacing provision re proposed members' meeting in accordance with Sec. 33-1065 with provision re meeting of members at which disposition is to be submitted for approval and adding provision re terms and conditions of and consideration to be received for disposition, amended Subsec. (e) by replacing references to “transaction” with references to “disposition” and adding provision re member approval may precede or follow authorization of disposition by board and taking of actions under Subsec. (b), amended Subsec. (f) by replacing former provisions with provisions re abandoned disposition, added new Subsecs. (g) and (h) re assets in the course of dissolution and assets of consolidated subsidiary, redesignated existing Subsec. (g) as Subsec. (i), replacing reference to “transaction” with reference to “disposition” therein, and made technical changes, effective July 1, 2003.