Section 10A-2A-11.04

Action on a plan of merger or stock exchange.

In the case of a corporation that is a constituent organization or the acquired entity in a stock exchange, the plan of merger or stock exchange shall be adopted in the following manner:

(a) The plan of merger or stock exchange shall first be adopted by the board of directors.

(b) Except as provided in subsections (h), (j), and (l) and in Section 10A-2A-11.05, the plan of merger or stock exchange shall then be approved by the stockholders. In submitting the plan of merger or stock exchange to the stockholders for approval, the board of directors shall recommend that the stockholders approve the plan or, in the case of an offer referred to in subsection (j)(2), that the stockholders tender their stock to the offeror in response to the offer, unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make a recommendation or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding.

(c) The board of directors may set conditions for the approval of the plan of merger or stock exchange by the stockholders or the effectiveness of the plan of merger or stock exchange.

(d) If the plan of merger or stock exchange is required to be approved by the stockholders, and if the approval is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders at which the plan is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation, foreign corporation, or eligible entity, the notice must also include or be accompanied by a copy or summary of the certificate of incorporation and bylaws or the organizational documents of that corporation, foreign corporation, or eligible entity. If the corporation is to be merged with a corporation, foreign corporation, or eligible entity and a new corporation, foreign corporation, or eligible entity is to be created pursuant to the merger, the notice must include or be accompanied by a copy or a summary of the certificate of incorporation and bylaws or the organizational documents of the new corporation, foreign corporation, or eligible entity.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of merger or stock exchange requires the approval of the stockholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan, and, if any class or series of stock is entitled to vote as a separate group on the plan of merger or stock exchange, the approval of each separate voting group at a meeting at which a quorum of the voting group is present consisting of a majority of the votes entitled to be cast on the merger or stock exchange by that voting group.

(f) Subject to subsection (g), separate voting by voting groups is required:

(1) on a plan of merger, by each class or series of stock that:

(i) are to be converted under the plan of merger into stock, other securities, eligible interests, obligations, rights to acquire stock, other securities or eligible interests, cash, other property, or any combination of the foregoing; or

(ii) are entitled to vote as a separate group on a provision in the plan that constitutes a proposed amendment to the certificate of incorporation of a surviving corporation that requires action by separate voting groups under Section 10A-2A-10.04;

(2) on a plan of stock exchange, by each class or series of stock included in the exchange, with each class or series constituting a separate voting group; and

(3) on a plan of merger or stock exchange, if the voting group is entitled under the certificate of incorporation to vote as a voting group to approve a plan of merger or stock exchange, respectively.

(g) The certificate of incorporation may expressly limit or eliminate the separate voting rights provided in subsection (f)(1)(i) and subsection (f)(2) as to any class or series of stock, except when the plan of merger or stock exchange (i) includes what is or would be in effect an amendment subject to subsection (f)(1)(ii), and (ii) will not effect a substantive business combination.

(h) Unless the certificate of incorporation otherwise provides, approval by the corporation's stockholders of a plan of merger is not required if:

(1) the corporation will survive the merger;

(2) except for amendments permitted by Section 10A-2A-10.05, its certificate of incorporation will not be changed; and

(3) each stockholder of the corporation whose stock was outstanding immediately before the effective date of the merger or stock exchange will hold the same number of shares of stock, with identical preferences, rights and limitations, immediately after the effective date of the merger.

(i) If as a result of a merger or stock exchange one or more stockholders of a corporation will have new personal liability with respect to the surviving organization or the acquiring entity, approval of the plan of merger or stock exchange will be ineffective without the consent to the plan of merger or stock exchange of the stockholder who will have new personal liability. A stockholder does not give consent required in this subsection (i) merely by consenting to a provision in the certification of incorporation, the bylaws, or an agreement of the stockholders, that allows for a plan of merger or stock exchange to impose new personal liability on that stockholder without that stockholder's consent at the time of the plan of merger or stock exchange.

(j) Unless the certificate of incorporation otherwise provides, approval by the stockholders of a plan of merger or stock exchange is not required if:

(1) the plan of merger or stock exchange expressly (i) permits or requires the merger or stock exchange to be effected under this subsection and (ii) provides that, if the merger or stock exchange is to be effected under this subsection, the merger or stock exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (j)(6);

(2) another party to the merger, the acquiring entity in the stock exchange, or a parent of another party to the merger or the acquiring entity in the stock exchange, makes an offer to purchase, on the terms provided in the plan of merger or stock exchange, any and all of the outstanding stock of the corporation that, absent this subsection, would be entitled to vote on the plan of merger or stock exchange, except that the offer may exclude stock of the corporation that is owned at the commencement of the offer by the corporation, the offeror, or any parent of the offeror, or by any wholly owned subsidiary of any of the foregoing;

(3) the offer discloses that the plan of merger or stock exchange provides that the merger or stock exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (j)(6) and that the stock of the corporation that is not tendered in response to the offer will be treated as set forth in subsection (j)(8);

(4) the offer remains open for at least 10 days;

(5) the offeror purchases all stock properly tendered in response to the offer and not properly withdrawn;

(6) the stock listed below is collectively entitled to cast at least the minimum number of votes on the merger or stock exchange that, absent this subsection, would be required by this Article 11 and by the certificate of incorporation for the approval of the merger or stock exchange by the stockholders, and by any other voting group entitled to vote on the merger or stock exchange at a meeting at which all stock entitled to vote on the approval was present and voted, and with the consent of the stockholders required under Section 10A-2A-11.04(i):

(i) stock purchased by the offeror in accordance with the offer;

(ii) stock otherwise owned by the offeror or by any parent of the offeror or any wholly owned subsidiary of any of the foregoing; and

(iii) stock subject to an agreement that the stock is to be transferred, contributed, or delivered to the offeror, any parent of the offeror, or any wholly owned subsidiary of any of the foregoing in exchange for stock or eligible interests in the offeror, parent, or subsidiary;

(7) the offeror or a wholly owned subsidiary of the offeror merges with or into, or effects a stock exchange in which it acquires stock of, the corporation; and

(8) each outstanding share of stock of each class or series of stock of the corporation that the offeror is offering to purchase in accordance with the offer, and that is not purchased in accordance with the offer, is to be converted in the merger into, or into the right to receive, or is to be exchanged in the stock exchange for, or for the right to receive, the same amount and kind of securities, eligible interests, obligations, rights, cash, or other property to be paid or exchanged in accordance with the offer for each share of stock of that class or series of stock that is tendered in response to the offer, except that stock of the corporation that is owned by the corporation or that are described in clause (ii) or (iii) of subsection (j)(6) need not be converted into or exchanged for the consideration described in this subsection (j)(8).

(k) As used in subsection (j):

(1) "offer" means the offer referred to in subsection (j)(2);

(2) "offeror" means the person making the offer;

(3) "parent" of an entity means a person that owns, directly or indirectly (through one or more wholly owned subsidiaries), all of the outstanding stock of or eligible interests in that entity;

(4) stock tendered in response to the offer shall be deemed to have been "purchased" in accordance with the offer at the earliest time as of which (i) the offeror has irrevocably accepted that stock for payment, and (ii) either (A) in the case of stock represented by certificates, the offeror, or the offeror's designated depository or other agent, has physically received the certificates representing that stock, or (B) in the case of stock without certificates, that stock has been transferred into the account of the offeror or its designated depository or other agent, or an agent's message relating to that stock has been received by the offeror or its designated depository or other agent; and

(5) "wholly owned subsidiary" of a person means an entity of or in which that person owns, directly or indirectly (through one or more wholly owned subsidiaries), all of the outstanding stock or eligible interests.

(l) Unless the certificate of incorporation otherwise provides,

(1) approval of a plan of stock exchange by the stockholders of a corporation is not required if the corporation is the acquiring entity in the stock exchange; and

(2) stock not to be exchanged under the plan of stock exchange is not entitled to vote on the plan.

(Act 2019-94, §1.)