§ 23-1-40-3 — Shareholder approval of plan of merger or share exchange; procedure; abandonment of plan; amendment of plan of merger or share exchange

(a) After adopting a plan of merger or share
exchange, the board of directors of each corporation party to the
merger, and the board of directors of the corporation whose shares will
be acquired in the share exchange, shall submit the plan of merger
(except as provided in subsection (g)) or share exchange for approval
by its shareholders.
(b) For a plan of merger or share exchange to be approved:
(1) the board of directors must recommend the plan of merger or
share exchange to the shareholders, unless the board of directors
determines that because of conflict of interest or other special
circumstances it should make no recommendation and
communicates the basis for its determination to the shareholders
with the plan; and
(2) the shareholders entitled to vote must approve the plan.
(c) The board of directors may condition its submission of the
proposed merger or share exchange on any basis.
(d) The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders' meeting in accordance
with IC 23-1-29-5. The notice must also state that the purpose, or one
(1) of the purposes, of the meeting is to consider the plan of merger or
share exchange and must contain or be accompanied by a copy or
summary of the plan.
(e) Unless this article, the articles of incorporation, or the board of
directors (acting under subsection (c)) requires a greater vote or a vote
by voting groups, the plan of merger or share 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.
(f) Separate voting by voting groups is required:
(1) on a plan of merger if the plan contains a provision that, if
contained in a proposed amendment to articles of incorporation,
would require action by one (1) or more separate voting groups on
the proposed amendment under IC 23-1-38-4; or
(2) 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.
(g) Action by the shareholders of the surviving corporation on a plan
of merger is not required if:
(1) the articles of incorporation of the surviving corporation will
not differ (except for amendments enumerated in IC 23-1-38-2)
from its articles before the merger;
(2) each shareholder of the surviving corporation whose shares
were outstanding immediately before the effective date of the
merger will hold the same proportionate number of shares relative
to the number of shares held by all such shareholders (except for
shares of the surviving corporation received solely as a result of
the shareholder's proportionate shareholdings in the other
corporations party to the merger), with identical designations,
preferences, limitations, and relative rights, immediately after;
(3) the number of voting shares outstanding immediately after the
merger, plus the number of voting shares issuable as a result of
the merger (either by the conversion of securities issued pursuant
to the merger or the exercise of rights and warrants issued
pursuant to the merger), will not exceed by more than twenty
percent (20%) the total number of voting shares (adjusted to
reflect any forward or reverse share split that occurs under the
plan of merger) of the surviving corporation outstanding
immediately before the merger; and
(4) the number of participating shares outstanding immediately
after the merger, plus the number of participating shares issuable
as a result of the merger (either by the conversion of securities
issued pursuant to the merger or the exercise of rights and
warrants issued pursuant to the merger), will not exceed by more
than twenty percent (20%) the total number of participating
shares (adjusted to reflect any forward or reverse share split that
occurs under the plan of merger) outstanding immediately before
the merger.
(h) As used in subsection (g):
(1) "Participating shares" means shares that entitle their holders
to participate without limitation in distributions.
(2) "Voting shares" means shares that entitle their holders to vote
unconditionally in elections of directors.
(i) After a merger or share exchange is authorized, and at any time
before articles of merger or share exchange are filed, the planned
merger or share exchange may be abandoned (subject to any
contractual rights), without further shareholder action, in accordance
with the procedure set forth in the plan of merger or share exchange or,
if none is set forth, in the manner determined by the board of directors.
(j) After a merger or share exchange is authorized, and at any time
before the articles of merger or share exchange are filed, the planned
merger or share exchange may be amended in accordance with the
procedure set forth in the plan of merger or share exchange or, if none
is set forth, in the manner determined by the board of directors.

Legislative History

As added by P.L.149-1986, SEC.24. Amended by P.L.107-1987, SEC.16; P.L.3-2008, SEC.165; P.L.118-2017, SEC.16.