2020 Maryland Statutes
Corporations and Associations
Title 3 - Corporations in General -- Extraordinary Actions
Subtitle 1 - Consolidation, Merger, and Transfer of Assets
Section 3-105 - Procedure
(a) A consolidation, merger, share exchange, or transfer of assets shall be approved in the manner provided by this section, except that:
(1) A merger of a 90% or more owned subsidiary with or into its parent need be approved only in accordance with the provisions of § 3–106 of this subtitle;
(2) A merger of a Maryland corporation in accordance with § 3–106.1 of this subtitle need be approved only in the manner provided in § 3–106.1 of this subtitle;
(3) A share exchange need be approved by a Maryland successor only by its board of directors and by any other action required by its charter;
(4) A transfer of assets need be approved by a Maryland transferee corporation only by its board of directors and by any other action required by its charter;
(5) A foreign corporation party to the transaction shall have the transaction advised, authorized, and approved in the manner and by the vote required by its charter and the laws of the place where it is organized;
(6) A merger need be approved by a Maryland successor corporation only by a majority of its entire board of directors if:
(i) The merger does not reclassify or change the terms of any class or series of its stock that is outstanding immediately before the merger becomes effective or otherwise amend its charter and the number of its shares of stock of such class or series outstanding immediately after the effective time of the merger does not increase by more than 20% of the number of its shares of the class or series of stock that is outstanding immediately before the merger becomes effective; or
(ii) There is no stock outstanding or subscribed for and entitled to be voted on the merger;
(7) A business trust party to a merger shall have the merger advised, authorized, and approved in the manner and by the vote required by its declaration of trust and the laws of the place where it is organized; and
(8) A consolidation, merger, or share exchange shall be approved by a Maryland corporation registered as an open–end investment company under the Investment Company Act of 1940 only by a majority of the entire board of directors and in the manner and by the vote required under the Investment Company Act of 1940.
(b) The board of directors of each corporation proposing to consolidate, merge, transfer its assets, or have its stock acquired in a share exchange shall:
(1) Adopt a resolution which declares that the proposed transaction is advisable on substantially the terms and conditions set forth or referred to in the resolution; and
(2) Direct that the proposed transaction be submitted for consideration at either an annual or a special meeting of the stockholders.
(c) Notice which states that a purpose of the meeting will be to act on the proposed consolidation, merger, share exchange, or transfer of assets shall be given by each corporation in the manner required by Title 2 of this article to:
(1) Each of its stockholders entitled to vote on the proposed transaction; and
(2) Each of its stockholders not entitled to vote on the proposed transaction, except the stockholders of a successor in a merger if the merger does not alter the contract rights of their stock as expressly set forth in the charter.
(d) An agreement of consolidation, merger, share exchange, or transfer of assets may require that the proposed transaction shall be submitted to the stockholders, even if the board of directors determines at any time after having declared the advisability of the proposed transaction that the proposed transaction is no longer advisable and either makes no recommendation to the stockholders or recommends that the stockholders reject the proposed transaction.
(e) The proposed consolidation, merger, share exchange, or transfer shall be approved by the stockholders of each corporation by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter.
