48-21-104 - Action on plan. - Tennessee Statutes

48-21-104. Action on plan.

(a)  The plan of merger or exchange shall be adopted by the board of directors of each domestic corporation that is a party to the merger or exchange and, except as provided in subsection (h) and in § 48-21-105, approved by the shareholders of the corporation.

(b)  After adopting the plan of merger or exchange, the board of directors of each corporation that is a party to the merger or exchange shall submit the plan of merger or exchange for approval by the shareholders of the corporation.

(c)  For a plan of merger or exchange to be approved:

     (1)  The board of directors must recommend that the plan of merger or exchange be approved by the shareholders of the corporation, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation, in which case the board of directors shall submit the plan of merger or exchange to the shareholders of the corporation for approval without recommendation and, in connection with the submission, shall communicate the basis for its determination that the plan be submitted for approval without any recommendation; and

     (2)  The shareholders entitled to vote must approve the plan.

(d)  The board of directors of a domestic corporation that is a party to a merger or exchange may condition its submission of the plan of merger or exchange to its shareholders on any basis.

(e)  If the plan of merger or exchange is required to be approved by the shareholders of a domestic corporation, the corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with § 48-17-105. The notice shall state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan of merger or exchange and shall contain or be accompanied by a copy or summary of the plan.

(f)  Unless chapters 11-27 of this title, the charter or the board of directors (acting pursuant to subsection (d)) requires a greater vote or a vote by voting groups, the plan of merger or exchange to be authorized must be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.

(g)  Separate voting by voting group of a domestic corporation shall be required for approval of a plan of merger or exchange if:

     (1)  In a merger, the plan of merger contains a provision that if contained in a proposed amendment to the charter would require action by that voting group under § 48-20-104;

     (2)  In an exchange, any shares of that voting group are to be exchanged pursuant to the terms of the plan of exchange; or

     (3)  In either a merger or exchange, that voting group is entitled under the charter or by agreement to vote as a voting group to approve a plan of merger or exchange.

(h)  Unless the charter otherwise requires, approval by the shareholders of a domestic corporation of a plan of merger or exchange shall not be required if:

     (1)  In a merger, the corporation's separate corporate existence does not cease as a result of the merger and, except for amendments enumerated in § 48-20-102, its charter will not differ from the charter before the merger; and

     (2)  In a merger or exchange:

          (A)  Each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger or exchange will hold the same number of shares, with identical designations, preferences, limitations and relative rights, immediately after the effective date of the merger or exchange;

          (B)  The voting power of the shares outstanding immediately after the merger or exchange, plus the voting power of the shares issuable as a result of the merger or exchange (either by the conversion of securities issued pursuant to the merger or exchange or by the exercise of rights and warrants issued pursuant to the merger or exchange), will not exceed by more than twenty percent (20%) the voting power of the total shares of the corporation outstanding immediately before the merger or exchange; and

          (C)  The number of participating shares outstanding immediately after the merger or exchange, plus the number of participating shares issuable as a result of the merger or exchange (either by the conversion of securities issued pursuant to the merger or exchange by the exercise of rights and warrants issued pursuant to the merger or exchange), will not exceed more than twenty percent (20%) the total number of participating shares outstanding immediately before the merger or exchange.

[Acts 1986, ch. 887, § 11.03; 1994, ch. 776, § 38; T.C.A., § 48-21-103; Acts 1996, ch. 618, § 2.]