§ 48-61-104 — Approval and adoption of plan of merger or membership exchange

Tennessee § 48-61-104

• Jurisdiction: Tennessee
• Title: 48

Text

In the case of a domestic nonprofit corporation that is a party to a merger or membership exchange: (1) The plan of merger or membership exchange shall be adopted by the board of directors of each party to the merger or membership exchange and approved by the members, if any, of each party; (2) Except as provided in subdivision (7) and in § 48-61-105 , after adopting the plan of merger or membership exchange, the board of directors shall submit the plan of merger or membership exchange for approval to the members if there are members entitled to vote on the plan. The board of directors must also transmit to the members a recommendation that the members 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 transmit to the members the basis for that determination; (3) The board of directors may condition its submission of the plan of merger or membership exchange to its members on any basis; (4) If the plan of merger or membership exchange is required to be approved by the members, and if the approval is to be given at a meeting, the corporation shall notify each member, whether or not entitled to vote, of the members' 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 membership 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 51-68 of this title, the charter, the organic documents 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 membership 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 memberships 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 or bylaws, would entitle the class of members to vote as a class on the proposed amendment under § 48-60-104 or § 48-60-205 ; (B) On a plan of membership exchange, by each class or series of memberships included in the exchange, with each class or series constituting a separate voting group; or (C) On a plan of merger or membership 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 membership exchange; (7) Unless the charter otherwise provides, approval by the members of a domestic corporation of a plan of merger or membership exchange shall not be required if: (A) The corporation will survive the merger or is the acquiring corporation in a membership exchange; (B) Except for amendments enumerated in § 48-60-102 , its charter will not differ from the charter before the merger; (C) Each member of the corporation whose memberships were outstanding immediately before the effective date of the merger or exchange will hold the same number of memberships, with identical designations, preferences, limitations and relative rights, immediately after the effective date of the merger or exchange; (D) The voting power of the members and memberships outstanding immediately after the merger or exchanging, plus the voting power of the memberships issuable as a result of the merger or exchange (either by the conversion of memberships, rights or eligible interests issued pursuant to the merger or exchange or by the exercise of rights or contracts issued pursuant to the merger or exchange), will not exceed by more than twenty percent (20%) the voting power of the total memberships of the corporation immediately before the merger or exchange; and (E) The number of participating memberships immediately after the merger or exchange, plus the number of participating memberships issuable as a result of the merger or exchange (either by the conversion of memberships, rights or eligible interests issued pursuant to the merger or exchange by the exercise of rights or options issued pursuant to the merger or exchange), will not exceed by more than twenty percent (20%) the total number of participating memberships immediately before the merger or exchange; and (8) If as a result of a merger or membership exchange, one (1) or more members 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 membership exchange shall require the execution, by each member, of a separate written consent to become subject to such owner liability.

Legislative History

Amended by 2015 Tenn. Acts, ch. 60,s 7, eff. 4/6/2015. Amended by 2014 Tenn. Acts, ch. 899,s 68, eff. 1/1/2015. Acts 1987, ch. 242, § 11.04.