§ 33-817 — Action on plan of merger or share exchange.

Connecticut § 33-817

• Jurisdiction: Connecticut
• Title 33: Corporations
• Ch. 601: Business Corporations

Text

In the case of a domestic corporation that is a party to a merger or the acquired corporation in a share exchange, the plan of merger or share exchange shall be adopted in the following manner: (1) The plan of merger or share exchange shall first be adopted by the board of directors. (2) Except as provided in subdivisions (8), (10) and (12) of this section and section 33-818 , the plan of merger or share exchange shall then be approved by the shareholders. In submitting the plan of merger or share exchange to the shareholders for approval, the board of directors shall recommend that the shareholders approve the plan, or, in the case of an offer referred to in subparagraph (B) of subdivision (10) of this section, that the shareholders tender their shares to the offeror in response to the offer, unless (A) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, or (B) section 33-754 applies. If either subparagraph (A) or (B) of this subdivision applies, the board of directors shall inform the shareholders of the basis for its so proceeding. (3) The board of directors may set conditions for the approval of the plan of merger or share exchange by the shareholders or the effectiveness of the plan of merger or share exchange. (4) If the plan of merger or share exchange is required to be approved by the shareholders, and if the approval is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders 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 foreign or domestic corporation, the notice must also include or be accompanied by a copy or summary of the certificate of incorporation and bylaws of that corporation. If the corporation is to be merged with a domestic or foreign corporation and a new domestic or foreign corporation 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 of the new corporation. (5) Unless the certificate of incorporation, or the board of directors acting pursuant to subdivision (3) of this section, requires a greater vote or a greater quorum, approval of the plan of merger or share exchange requires the approval of the shareholders 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 shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of each such 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 plan of merger or share exchange by that voting group. (6) Subject to subdivision (7) of this section, separate voting by voting groups is required: (A) On a plan of merger, by each class or series of shares that: (i) Are to be converted under the plan of merger into shares, other securities, interests, obligations, rights to acquire shares or other securities or interests, cash, other property, or any combination thereof; 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 33-798 ; (B) on a plan of share exchange, by each class or series of shares included in the exchange, with each class or series constituting a separate voting group; and (C) on a plan of merger or share 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 share exchange, respectively. (7) The certificate of incorporation may expressly limit or eliminate the separate voting rights provided in subparagraph (A)(i) of subdivision (6) of this section and in subparagraph (B) of subdivision (6) of this section as to any class or series of shares, except when the plan of merger or share exchange (A) includes what is or would be in effect an amendment subject to subparagraph (A)(ii) of subdivision (6) of this section, and (B) will not effect a substantive business combination. (8) Unless the certificate of incorporation otherwise provides, approval by the corporation's shareholders of a plan of merger is not required if: (A) The corporation will survive the merger; (B) except for amendments permitted by section 33-796 , its certificate of incorporation will not be changed; and (C) each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical preferences, rights and limitations, immediately after the effective date of the merger. (9) If, as a result of a merger or a share exchange, one or more shareholders of a domestic corporation would become subject to personal liability for the obligations or liabilities of any other person or entity, approval of the plan of merger or share exchange requires the signing in connection with the transaction, by each such shareholder, of a separate written consent to become subject to such personal liability. (10) Unless the certificate of incorporation otherwise provides, approval by the shareholders of a plan of merger or share exchange is not required if: (A) The plan of merger or share exchange expressly (i) permits or requires the merger or share exchange to be effected under this subdivision, and (ii) provides that, if the merger or share exchange is to be effected under this subdivision, the merger or share exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subparagraph (F) of this subdivision; (B) another party to the merger, the acquiring corporation in the share exchange, or a parent of another party to the merger or the acquiring corporation in the share exchange, makes an offer to purchase, on the terms provided in the plan of merger or share exchange, any and all of the outstanding shares of the corporation that, absent the provisions of this subdivision, would be entitled to vote on the plan of merger or share exchange, except that the offer may exclude shares of the corporation that are 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 the corporation, the offeror or by any wholly owned subsidiary of any of them; (C) the offer discloses that the plan of merger or share exchange provides that the merger or share exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subparagraph (F) of this subdivision and that the shares of the corporation that are not tendered in response to the offer will be treated as set forth in subparagraph (H) of this subdivision; (D) the offer remains open for at least ten days; (E) the offeror purchases all shares properly tendered in response to the offer and not properly withdrawn; (F) the shares set forth in this subparagraph are collectively entitled to cast at least the minimum number of votes on the merger or share exchange that, absent the provisions of this subdivision, would be required by sections 33-814 to 33-821a , inclusive, and by the certificate of incorporation for the approval of the merger or share exchange by the shareholders and by any other voting group entitled to vote on the merger or share exchange at a meeting at which all shares entitled to vote on the approval were present and voted: (i) Shares purchased by the offeror in accordance with the offer; (ii) shares otherwise owned by the offeror or by any parent of the offeror or any wholly owned subsidiary of the offeror or by any parent of the offeror; and (iii) shares subject to an agreement that are to be transferred, contributed or delivered to the offeror, any parent of the offeror or any wholly owned subsidiary of any of them in exchange for shares in such offeror, parent or subsidiary; (G) the offeror or a wholly owned subsidiary of the offeror merges with or into, or effects a share exchange in which it acquires shares of the corporation; and (H) each outstanding share of each class or series of shares 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 share exchange for, or for the right to receive, the same amount and kind of securities, interests, obligations, rights, cash or other property to be paid or exchanged in accordance with the offer for each share of that class or series of shares that is tendered in response to the offer, except that shares of the corporation that are owned by the corporation or that are described in subparagraph (F)(ii) or (iii) of this subdivision need not be converted into or exchanged for the consideration described in this subparagraph. (11) As used in subdivision (10) of this section, (A) “offer” means the offer referred to in subparagraph (B) of subdivision (10) of this section; (B) “offeror” means the person making the offer; (C) “parent” of a corporation means a person that owns, directly or indirectly, through one or more wholly owned subsidiaries, all of the outstanding shares of that corporation; (D) shares 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 those shares for payment, and (ii) either (I) in the case of shares represented by certificates, the offeror, or the offeror's designated depository or other agent, has physically received the certificates representing those shares, or (II) in the case of shares without certificates, those shares have been transferred into the account of the offeror or its designated depository or other agent, or an agent's message relating to those shares has been received by the offeror or its designated depository or other agent; and (E) “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 shares or interests. (12) Unless the certificate of incorporation otherwise provides, (A) approval of a plan of share exchange by the shareholders of a domestic corporation is not required if the corporation is the acquiring corporation in the share exchange; and (B) shares not to be exchanged under the plan of share exchange are not entitled to vote on the plan. (13) Notwithstanding any provision of subdivision (5) of this section, a plan of merger or share exchange of a corporation which was incorporated under the laws of this state, whether under chapter 599 of the general statutes, revision of 1958, revised to January 1, 1995, or any other general law or special act, prior to January 1, 1997, to be authorized by such corporation, shall be approved by (A) the affirmative vote of at least two-thirds of the voting power of each voting group entitled to vote thereon unless (i) the certificate of incorporation expressly provides otherwise, or (ii) approval by the corporation's shareholders of the plan of merger or share exchange is not required under either subdivision (8) or (10) of this section, and (B) the affirmative vote of at least two-thirds of the voting power of each class of stock of such corporation outstanding prior to January 1, 1997, and not otherwise entitled to vote thereon, unless (i) the certificate of incorporation expressly provides otherwise; or (ii) approval by the corporation's shareholders of the plan of merger or share exchange is not required under either subdivision (8) or (10) of this section.

Legislative History

(P.A. 94-186, S. 134, 215; P.A. 96-271, S. 99–103, 254; P.A. 03-18, S. 20; P.A. 10-35, S. 7; P.A. 11-241, S. 37; P.A. 17-108, S. 15.) History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced “articles” of incorporation with “certificate” of incorporation where appearing, amended Subsec. (i) to replace “articles” of merger or share exchange with “certificate” of merger or share exchange and amended Subsec. (j) to replace “January 1, 1996” with “January 1, 1997”, effective January 1, 1997; P.A. 03-18 substantially revised section, deleting former Subsecs. (a) and (b), adding provision re domestic corporation that is a party to a merger or share exchange, adding Subdivs. (1) and (2) re adoption of plan by board and submission of plan to shareholders for approval, redesignating Subsecs. (c) to (g) as Subdivs. (3) to (7) and adding provisions re shareholder approval and meeting, re copy or summary of certificate of incorporation or organizational documents included in shareholder notice, re separate voting by each class or series of shares and by voting group and re when shareholder approval of plan is not required unless the certificate of incorporation otherwise provides, deleting former Subsecs. (g)(3) and (4), (h) and (i), adding Subdiv. (8) re consent to personal liability, redesignating Subsec. (j) as Subdiv. (9), and making conforming and technical changes throughout, effective July 1, 2003; P.A. 10-35 amended Subdiv. (2) to designate existing provisions re board determination that it should not make a recommendation due to conflicts of interest or other special circumstances as Subpara. (A), add Subpara. (B) re whether Sec. 33-754 applies, and provide that if Subpara. (A) or (B) applies, board must transmit to shareholders basis for so proceeding, rather than basis for determination; P.A. 11-241 amended Subdiv. (4) to delete provisions re other entity and organizational documents and change “must” to “shall”, effective January 1, 2014; P.A. 17-108 substantially amended section including by adding reference to acquired corporation, adding “, the plan of merger or share exchange shall be adopted in the following manner”, replacing “must” with “shall first” in Subdiv. (1), replacing reference to Subdiv. (7) with reference to Subdivs. (8), (10) and (12), deleting provision re board must submit plan to shareholders, and adding provisions re plan or share exchange to be approved by shareholders and shareholders to tender shares to offeror in response to offer in Subdiv. (2), replacing “on any basis” with “or the effectiveness of the plan of merger or share exchange” in Subdiv. (3), replacing “shall” with “must”, replacing references to corporation with references to domestic or foreign corporation, and adding references to bylaws in Subdiv. (4), replacing provisions re approval by voting group with provisions re same in Subdiv. (5), adding reference to Subdiv. (7), adding “or interests”, replacing “if contained in” with “constitutes”, and replacing “, would require” with “of a surviving corporation that requires” in Subdiv. (6), adding new Subdiv. (7) re separate voting rights, redesignating existing Subdiv. (7) as new Subdiv. (8) and amending same to delete references to share exchange, redesignating existing Subdiv. (8) as new Subdiv. (9) and amending same to replace “execution” with “signing in connection with the transaction”, adding Subdiv. (10) re approval by shareholders of plan of merger or share exchange not required, adding Subdiv. (11) re definitions, adding Subdiv. (12) re approval of plan of share exchange by shareholders not required, redesignating existing Subdiv. (9) as Subdiv. (13) and amending same to delete provisions re if corporation is surviving corporation of such merger, and adding provisions re approval by shareholders of plan of merger or share exchange not required, and making technical and conforming changes.