2006 Louisiana Laws - RS 12:116 — Share exchange

§116.  Share exchange

A.  A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation if the board of directors of each corporation adopts a plan of exchange and the shareholders of the corporation whose shares will be acquired approve the plan of exchange in the manner provided in Subsection E of this Section.  

B.  The plan of exchange shall set forth all of the following:

(1)  The name of the corporation whose shares will be acquired and the name of the acquiring corporation.  

(2)  The terms and conditions of the share exchange.  

(3)  The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring or any other corporation or foreign corporation or for cash or other property in whole or part.  

C.  The plan of exchange may set forth other provisions relating to the exchange.  

D.  This Section does not limit the power of a corporation or foreign corporation to acquire all or part of the shares of one or more classes or series of another corporation or foreign corporation through a voluntary exchange or otherwise.  

E.  After adopting a plan of exchange, the board of directors of the corporation whose shares will be acquired in the share exchange shall submit the plan of exchange for approval by its shareholders.  The corporation shall give written notice to each shareholder, whether or not entitled to vote, of the annual or special meeting at which the plan of exchange will be voted on.  The notice shall include a statement that the purpose, or one of the purposes, of the meeting is to consider the plan of exchange and shall contain or be accompanied by a copy or summary of the plan of exchange, and the notice shall include, if applicable, the following statement: "Dissenting shareholders who comply with the procedural requirements of the Business Corporation Law of Louisiana will be entitled to receive payment of the fair cash value of their shares if the share exchange is effected upon approval by less than eighty percent of the corporation's total voting power."

F.  Unless this Chapter or the articles require a greater vote or a vote by class or series, the plan of exchange to be authorized shall be approved by a vote of at least two-thirds of the voting power present of each class or series included in the share exchange, voting separately as a class, or by such larger or smaller vote (not less than a majority) of the voting power present or of the total voting power of each class or series included in the share exchange, voting separately as a class, as the articles may require, at a meeting of shareholders of which notice has been given in accordance with Subsection E of this Section.  When the articles specify the vote required to effect a merger of the corporation whose shares will be acquired in a share exchange, but do not specify the vote required for a share exchange, the vote specified in the articles to effect a merger shall be the vote required to effect a share exchange.  It shall not be necessary for the shareholders of the acquiring corporation to approve a share exchange, unless that corporation's articles provide otherwise or provide expressly that a shareholder vote shall be required to approve a merger that under this Chapter would not otherwise be required to be approved by shareholders, in which case the share exchange shall be approved by the same vote as required to approve a merger.  

G.  After a share exchange is authorized, and at any time before articles of share exchange are filed, the planned 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 exchange or, if none is set forth, in the manner determined by the boards of directors of the corporations which are parties to such exchange.  

H.  After a plan of exchange is approved by the shareholders of the corporation whose shares will be acquired, the acquiring corporation shall deliver to the secretary of state for filing articles of share exchange executed and acknowledged by the president or a vice president of both the acquiring corporation and the corporation whose shares were acquired, setting forth all of the following:

(1)  The plan of exchange.  

(2)  The designation, number of outstanding shares, and number of votes entitled to be cast by each class or series included in the share exchange.  

(3)  Either the total number of votes cast for and against the plan of exchange by each class or series entitled to vote, or the total number of votes cast for the plan of exchange by each class or series entitled to vote and a statement that the number cast for the plan of exchange by each class or series entitled to vote was sufficient for approval by that class or series.

I.  The secretary of state, after all fees and charges have been paid as required by law, shall record the articles of share exchange in his office, endorse thereon the date, and, if requested, the hour of filing thereof with him, and issue a certificate of share exchange, which shall recite the names of the acquiring corporation and of the corporation whose shares were acquired, the name of the state or country under the laws of which each was formed, the date and, if endorsed on the agreement, the hour of filing of the articles of share exchange with him, and the effective time of the share exchange, if stated in the plan of exchange or the articles of share exchange.  The articles of share exchange may be delivered to the secretary of state in advance, for filing as of any specified date and, if specified upon such delivery as of any given time on such date within thirty days after the date of delivery.  Unless otherwise specified in the plan of exchange or the articles of share exchange, the share exchange shall take effect on the date on which the articles of share exchange were delivered to the secretary of state for filing.  

J.  When a share exchange takes effect, the shares of the acquired corporation are exchanged as provided in the plan of exchange, and the former holders of the shares are entitled only to the exchange rights provided in the plan of exchange or to their rights under Subsection K of this Section.  

K.  A shareholder entitled to vote his shares of a corporation whose shares will be acquired in a share exchange may dissent from, and obtain payment of the fair cash value of such shares, to the same extent and in the same manner as is provided for in R.S. 12:131 in the case of a shareholder of a corporation that has, by vote of its shareholders, become a party to a merger.  

L.(1)  One or more foreign corporations may acquire by share exchange outstanding shares of one or more classes or series of one or more business corporations, whether or not a share exchange is permitted by the law of the state or country under whose law the acquiring corporation is incorporated if:

(a)  The foreign corporation complies with Subsection H of this Section; and

(b)  The business corporation whose shares are acquired complies with the applicable provisions of this Section.  

(2)  Upon the share exchange taking effect, the acquiring foreign corporation is deemed to:

(a)  Appoint the secretary of state as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of the business corporation whose shares were acquired in the share exchange; and

(b)  Agree that it will promptly pay or cause to be paid to the dissenting shareholders of the business corporation whose shares were acquired the amount, if any, to which they are entitled under Subsection K of this Section.  

Acts 1990, No. 849, §1, eff. for taxable years after Dec.  31, 1989.