2012 Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 3 - Corporations And Associations
Chapter 26 - Business Corporations Generally
Subchapter 10 - -- Conversion and Merger
§ 4-26-1007 - Action on plan of merger by constituent corporation.

(a) Except as provided in subsection (g) of this section and after adopting a plan of merger, the board of directors of each corporation which is a party to the merger shall submit the plan of merger for approval by its shareholders.

(b) A plan of merger may be approved if the:

(1) Board of directors recommends the plan of merger to the shareholders, unless the board of directors:

(A) Determines that because of a conflict of interest or other special circumstances it should make no recommendation; and

(B) Communicates the basis for its determination at the time the plan of merger is submitted to the shareholders; and

(2) Shareholders entitled to vote approve the plan.

(c) The board of directors may condition its submission of the proposed merger on any basis.

(d) (1) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting:

(A) Not less than twenty (20) days before the meeting; and

(B) In the manner provided in § 4-26-703 for giving notice of meetings of shareholders.

(2) The notice shall:

(A) State that a purpose of the meeting is to consider the plan of merger; and

(B) Contain or be accompanied by a copy or summary of the plan.

(e) Unless this chapter, the articles of incorporation, or the board of directors acting under subsection (c) of this section require a greater vote or a vote by voting groups, the plan of merger to be authorized must be approved by the affirmative vote of the holders of at least two-thirds (2/3) of the outstanding shares entitled to vote, and if by voting group, by each voting group entitled to vote separately on the plan by at least two-thirds (2/3) of all the votes entitled to be cast on the plan by the voting group.

(f) Separate voting by voting groups is required on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to the articles of incorporation, would require action by one (1) or more separate voting groups on the proposed amendment under § 4-26-303.

(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 § 4-26-307 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 number of shares or the interest comparable to shares in an entity other than a corporation, with identical designations, preferences, limitations, and relative rights, immediately after the merger;

(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 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 outstanding immediately before the merger.

(h) As used in subsection (g) of this section:

(1) "Participating shares" means shares that entitle their holders to participate without limitation in distributions; and

(2) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.

(i) Subject to any contractual rights, at any time before articles of merger are filed the planned merger may be abandoned without further shareholder action in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.