2021 New Mexico Statutes
Chapter 53 - Corporations
Article 14 - Business Corporations; Mergers and Consolidations
Section 53-14-3 - Approval by shareholders.
A. The board of directors of each corporation in the case of a merger or consolidation, and the board of directors of the corporation the shares of which are to be acquired in the case of an exchange, upon approving a plan of merger, consolidation or exchange, shall, by resolution, direct that the plan be submitted to a vote at a meeting of its shareholders, which may be either an annual or a special meeting. Written notice shall be given to each shareholder of record, whether or not entitled to vote at the meeting, not less than twenty days before the meeting in the manner provided in the Business Corporation Act for the giving of notice of meetings of shareholders and, whether the meeting is an annual or a special meeting, shall state that the purpose or one of the purposes is to consider the proposed plan. A copy or a summary of the plan shall be included in or enclosed with the notice.
B. At each meeting, a vote of the shareholders shall be taken on the proposed plan. The plan shall be approved upon receiving the affirmative vote of the holders of a majority of the shares entitled to vote thereon of each such corporation, unless any class of shares of any such corporation is entitled to vote thereon as a class, in which event, as to such corporation, the plan shall be approved upon receiving the affirmative vote of the holders of a majority of the shares of each class of shares entitled to vote thereon. Any class of shares of any such corporation shall be entitled to vote as a class if any such plan contains any provision which, if contained in a proposed amendment to articles of incorporation, would entitle such class of shares to vote as a class and, in the case of an exchange, if the class is included in the exchange.
C. After such approval by a vote of the shareholders of each such corporation and at any time prior to the filing of the articles of merger or consolidation or exchange, the merger or consolidation or exchange may be abandoned pursuant to provisions therefor, if any, set forth in the plan.
D. (1) Notwithstanding the provisions of Subsections A and B of this section, submission of a plan of merger to a vote at a meeting of shareholders of a surviving corporation shall not be required if:
(a) the articles of incorporation of the surviving corporation do not differ except in name from those of the corporation before the merger;
(b) each holder of shares of the surviving corporation which were outstanding immediately before the effective date of the merger is to hold the same number of shares with identical rights immediately after;
(c) the number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable on conversion of other securities issued by virtue of the terms of the merger and on exercise of rights and warrants so issued, will not exceed by more than twenty percent the number of voting shares outstanding immediately before the merger; and
(d) the number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable on conversion of other securities issued by virtue of the terms of the merger and on exercise of rights and warrants so issued, will not exceed by more than twenty percent the number of participating shares outstanding immediately before the merger.
(2) As used in this subsection:
(a) "voting shares" means shares which entitle their holders to vote unconditionally in election of directors; and
(b) "participating shares" means shares which entitle their holders to participate without limitations in distribution of earnings or surplus.
History: 1953 Comp., § 51-27-3, enacted by Laws 1967, ch. 81, § 70; 1983, ch. 304, § 54.ANNOTATIONS
Compiler's notes. — This section is derived from Section 73 of the ABA Model Business Corporation Act.
Cross references. — For applicability of lowered voting requirements to existing corporations, see 53-18-6.1 NMSA 1978.
The 1983 amendment, effective June 17, 1983, inserted "in the case of . . . of an exchange," inserted "or exchange" following "consolidation" and inserted "its" preceding "shareholders" in the first sentence of Subsection A, deleted "of merger or consolidation" following "plan" in the second and last sentences of Subsection A; deleted "of merger or consolidation" following "plan" in the first sentence and in two places in the second sentence of Subsection B; substituted "a majority" for "two-thirds" in two places in the second sentence of Subsection B; substituted "any such plan" for "the plan of merger or consolidation, as the case may be" and added "and, in the case of an exchange, if the class is included in the exchange" at the end of the last sentence of Subsection B; inserted "such" preceding "corporation," inserted "or exchange" in two places, and deleted "of merger or consolidation" following "plan" in Subsection C; and added Subsection D.
Law reviews. — Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 19 Am. Jur. 2d Corporations §§ 2612, 2618.
Status of owners of nonregistered stock as "stockholders" within state statute relating to merger or consolidation or reorganization of corporation, or sale of its entire assets, 158 A.L.R. 983.
Duty of corporate directors to exercise "informed" judgment in recommending responses to merger or tender offers, 46 A.L.R.4th 887.
19 C.J.S. Corporations § 798.