47-33-2. Declaration of public policy. The Legislature hereby finds and declares the following to be the public policy of this state:

(1) This state has traditionally regulated the affairs of corporations organized in this state, including the regulation of mergers and other business combinations and the rights of shareholders. The United State Supreme Court has recently reaffirmed the power of states to regulate these affairs.

(2) Domestic public corporations encompass, represent and affect, through their ongoing business operations, a variety of constituencies, including South Dakota shareholders, employees, customers, creditors, suppliers of goods and services, and local communities and their economies whose welfare is vital to the state's interests.

(3) In order to promote such welfare, the regulation of the internal affairs of domestic public corporations as reflected in the laws of this state governing business corporations should allow for the stable, long-term growth of domestic public corporations.

(4) Takeovers of publicly held corporations frequently occur through acquisition techniques which in effect coerce shareholders to participate in the transaction.

(5) Takeovers of publicly held corporations are also frequently financed largely through debt to be repaid in the short term through changes in the operations of the target corporation, by the sale of substantial assets of the target corporation, and other means. In other states, such takeovers have impaired local employment conditions and disrupted local commercial activity. These takeovers involve a substantial risk of unfair business dealing, may prevent shareholders from realizing the full value of their holdings through forced mergers and other coercive devices, and may undermine the state's interest in promoting stable relationships involving the corporations that it charters. The threat of these takeovers also deprives shareholders of value by forcing the adoption of short-term business strategies as well as defensive tactics which may not be in the public interest.

(6) This chapter is not intended to prevent the use of any other lawful measure to challenge or defend against attempts to acquire control of a domestic public corporation, including, without limiting the generality of the foregoing, rights and options described in § 47-33-5.Source: SL 1990, ch 369, § 102.