Sec. 21.454. APPROVAL OF EXCHANGE. (a) A corporation the shares of which are to be acquired in an exchange under Chapter 10 must approve the exchange by complying with this section.

(b) The board of directors shall adopt a resolution that approves the plan of exchange and:

(1) recommends that the plan of exchange be approved by the shareholders of the corporation; or

(2) directs that the plan of exchange be submitted to the shareholders for approval without recommendation if the board of directors determines for any reason not to recommend approval of the plan of exchange.

(c) The plan of exchange shall be submitted to the shareholders of the corporation for approval as provided by this subchapter. The board of directors may place conditions on the submission of the plan of exchange to the shareholders.

(d) If the board of directors approves a plan of exchange but does not adopt a resolution recommending that the plan of exchange be approved by the shareholders of the corporation, the board of directors shall communicate to the shareholders the reason for the board's determination to submit the plan of exchange to shareholders without a recommendation.

(e) Except as provided by Section 21.457, the shareholders of the corporation shall approve the plan of exchange as provided by this subchapter.

(f) If after the adoption of a resolution under Subsection (b)(2) the board of directors of the corporation determines that the plan of exchange is not advisable, the plan of exchange may be submitted to the shareholders of the corporation with a recommendation that the shareholders not approve the plan of exchange.

(g) A plan of exchange for a corporation may include a provision requiring that the plan of exchange be submitted to the shareholders of the corporation regardless of whether the board of directors determines, after adopting a resolution or making a determination under this section, that the plan of exchange is not advisable and recommends that the shareholders not approve the plan of exchange.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 62, eff. January 1, 2006.

Acts 2007, 80th Leg., R.S., Ch. 688 (H.B. 1737), Sec. 82, eff. September 1, 2007.