§414-313  Action plan.  (a)  Afteradopting a plan of merger or share exchange, the board of directors of eachcorporation party to the merger, and the board of directors of the corporationwhose shares will be acquired in the share exchange, shall submit the plan ofmerger (except as provided in subsection (h)) or share exchange for approval byits shareholders.

(b)  For a plan of merger or share exchange tobe approved:

(1)  The board of directors shall recommend the planof merger or share exchange to the shareholders, unless the board of directorsdetermines that because of conflict of interest or other special circumstancesit should make no recommendation and communicates the basis for itsdetermination to the shareholders with the plan; and

(2)  The shareholders entitled to vote shall approvethe plan.

(c)  The board of directors may condition itssubmission of the proposed merger or share exchange on any basis.

(d)  The corporation shall notify eachshareholder, whether or not entitled to vote, of the proposed shareholders'meeting in accordance with section 414-125.  The notice shall also state thatthe purpose, or one of the purposes, of the meeting is to consider the plan ofmerger or share exchange and contain or be accompanied by a copy or summary ofthe plan.

(e)  With respect to corporations incorporatedon or after July 1, 1987, at such a meeting, a vote of the shareholders shallbe taken on the proposed plan.  The plan shall be approved upon receiving theaffirmative vote of the holders of a majority of each class of the sharesentitled to vote thereon as a class and of the total shares entitled to votethereon.  Any class of shares of any such corporation shall be entitled to voteas a class if any such plan contains any provision that, if contained in aproposed amendment to articles of incorporation, would entitle that class ofshares to vote as a class and, in the case of an exchange, if the class isincluded in the exchange.

(f)  With respect to corporations incorporatedbefore July 1, 1987, at such meeting, a vote of the shareholders shall be takenon the proposed plan.  The plan shall be approved upon receiving theaffirmative vote of the holders of three-fourths of all the issued andoutstanding shares of stock having voting power even though their right to voteis otherwise restricted or denied by the articles, bylaws, or resolutions ofany such corporation.  The articles of incorporation may be amended by the voteset forth in the preceding sentence to provide for a lesser proportion ofshares, or of any class or series thereof, than is provided in the precedingsentence, in which case the articles of incorporation shall control; providedthat the lesser proportion shall be not less than the proportion set forth insubsection (e).

(g)  Separate voting by voting groups isrequired:

(1)  On a plan of merger if the plan contains aprovision that, if contained in a proposed amendment to articles ofincorporation, would require action by one or more separate voting groups onthe proposed amendment under section 414-284; or

(2)  On a plan of share exchange by each class orseries of shares included in the exchange, with each class or seriesconstituting a separate voting group.

(h)  Action by the shareholders of thesurviving corporation on a plan of merger is not required if:

(1)  The articles of incorporation of the survivingcorporation will not differ (except for amendments enumerated in section414-282) from the articles of incorporation before the merger;

(2)  Each shareholder of the surviving corporationwhose shares were outstanding immediately before the effective date of themerger will hold the same number of shares, with identical designations,preferences, limitations, and relative rights, immediately after the merger;

(3)  The number of voting shares outstandingimmediately after the merger, plus the number of voting shares issuable as aresult of the merger (either by the conversion of securities issued pursuant tothe merger or the exercise of rights and warrants issued pursuant to themerger), will not exceed by more than twenty per cent the total number ofvoting shares of the surviving corporation outstanding immediately before themerger; and

(4)  The number of participating shares outstandingimmediately after the merger, plus the number of participating shares issuableas a result of the merger (either by the conversion of securities issuedpursuant to the merger or exercise of rights and warrants issued pursuant tothe merger), will not exceed by more than twenty per cent the total number ofparticipating shares outstanding immediately before the merger.

(i)  As used in subsection (h):

"Participating shares" means sharesthat entitle their holders to participate without limitations in distributions.

"Voting shares" means shares thatentitle their holders to vote unconditionally in elections of directors.

(j)  After a merger or share exchange isauthorized, and

at any time before articles of merger or shareexchange are filed, the planned merger or share exchange may be abandoned(subject to any contractual rights), without further shareholder action, inaccordance with the procedure set forth in the plan of merger or share exchangeor, if none is set forth, in the manner determined by the board of directors.  A plan of merger may provide that at any timeprior to the time that the plan becomes effective, the plan may be terminatedby the board of directors of any constituent corporation notwithstandingapproval of the plan by the stockholders of all or any of the constituentcorporations.  If the plan of merger is terminated after the filing of thearticles but before the plan has become effective, a certificate of terminationshall be filed with the department director.  A plan of merger may allow theboards of directors of the constituent corporations to amend the plan at anytime prior to the time that the plan becomes effective; provided that anamendment made subsequent to the adoption of the plan by the stockholders ofany constituent corporation shall not:

(1)  Alter orchange the amount or kind of shares, securities, cash, property, or rights orany of them to be received in exchange for or on conversion of all or any ofthe shares of any class or series thereof of the constituent corporation;

(2)  Alter orchange any term of the organizing articles of the surviving entity to beeffected by the merger; or

(3)  Alter orchange any of the terms and conditions of the plan if the alteration or changewould adversely affect the holders of any class or series thereof of theconstituent corporation.

If the planof merger is amended after the articles are filed with the department directorbut before the plan has become effective, articles of amendment shall be filedwith the department director.

(k)  A merger or share exchange takes effect onthe filing date of the articles of merger or share exchange, or on the datesubsequent to the filing as set forth in the articles of merger or shareexchange; provided that the effective date shall not be  more than thirty daysfrom the filing date. [L 2000, c 244, pt of §1; am L 2001, c 55, §18; am L2002, c 41, §8]