§ 48-21-104 — Action on plan of merger or share exchange

In the case of a domestic corporation that is a party to a merger or share exchange: (1) The plan of merger or share exchange shall be adopted by the board of directors of each party to the merger or share exchange and approved by the shareholders; (2) Except as provided in subdivision (7) and in § 48-21-105 , after adopting the plan of merger or share exchange, the board of directors shall submit the plan of merger or share exchange for approval by the shareholders. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must also transmit to the shareholders the basis for that determination; (3) The board of directors may condition its submission of the plan of merger or share exchange to its shareholders on any basis; (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, whether or not entitled to vote, of the shareholders' meeting at which the plan is to be submitted for approval. The notice shall state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan of merger or share exchange and shall contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation or other entity, the notice shall also include or be accompanied by a copy or summary of the charter or organic documents of that corporation or other entity. If the corporation is to be merged into a corporation or other entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the charter or organizational documents of the new corporation or other entity; (5) Unless chapters 11-27 of this title, the charter, or the board of directors acting pursuant to subdivision (3) 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; (6) Separate voting by voting groups is required: (A) On a plan of merger, by each class or series of shares that would be entitled to vote as a separate group on a provision in the plan that, if contained in a proposed amendment to the charter, would require action by separate voting groups under § 48-20-104 ; (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; or (C) On a plan of merger or share exchange, if the voting group is entitled under the charter or by agreement to vote as a voting group to approve a plan of merger or share exchange; (7) Unless the charter otherwise provides, approval by the shareholders of a domestic corporation of a plan of merger or share exchange shall not be required if: (A) The corporation will survive the merger or is the acquiring corporation in a share exchange; (B) Except for amendments enumerated in § 48-20-102 , its charter will not differ from the charter before the merger; (C) 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; (D) 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 (E) 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; and (8) If as a result of a merger or share exchange one (1) or more shareholders of a domestic corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of merger or share exchange shall require the execution, by each shareholder, of a separate written consent to become subject to such owner liability.

Legislative History

Amended by 2015 Tenn. Acts, ch. 60,s 2, eff. 4/6/2015. Acts 1986, ch. 887, § 11.03; 1994, ch. 776, § 38; T.C.A., §48-21-103; Acts 1996, ch. 618, § 2; 2012, ch. 1051, § 39.