Sec. 21.459. NO SHAREHOLDER VOTE REQUIREMENT FOR CERTAIN FUNDAMENTAL BUSINESS TRANSACTIONS. (a) Unless required by the corporation's certificate of formation, a plan of merger is not required to be approved by the shareholders of a corporation if:

(1) the corporation is the sole surviving corporation in the merger;

(2) the certificate of formation of the corporation following the merger will not differ from the corporation's certificate of formation before the merger;

(3) immediately after the effective date of the merger, each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations, and relative rights;

(4) the sum of the voting power of the number of voting shares outstanding immediately after the merger and the voting power of securities that may be acquired on the conversion or exercise of securities issued under the merger does not exceed by more than 20 percent the voting power of the total number of voting shares of the corporation that are outstanding immediately before the merger; and

(5) the sum of the number of participating shares that are outstanding immediately after the merger and the number of participating shares that may be acquired on the conversion or exercise of securities issued under the merger does not exceed by more than 20 percent the total number of participating shares of the corporation that are outstanding immediately before the merger.

(b) Unless required by the certificate of formation, a plan of merger effected under Section 10.005 or 10.006 does not require the approval of the shareholders of the corporation.

(c) This subsection applies only to a corporation that is a party to the merger and has a class or series of shares that are, immediately before the date its board of directors approves the plan of merger, either listed on a national securities exchange or held of record by at least 2,000 shareholders. Unless required by the corporation's certificate of formation, a plan of merger is not required to be approved by the shareholders of the corporation if:

(1) the plan of merger expressly:

(A) permits or requires the merger to be effected under this subsection; and

(B) provides that any merger effected under this subsection shall be effected as soon as practicable following the consummation of the offer;

(2) an organization consummates an offer for all of the outstanding shares of the corporation on the terms provided in the plan of merger that, absent this subsection, would be entitled to vote on the approval of the plan of merger, except that:

(A) the offer may be conditioned on the tender of a minimum number or percentage of shares of the corporation or of any class or series of shares of the corporation;

(B) the offer may exclude any excluded shares; and

(C) the organization may consummate separate offers for separate classes or series of shares of the corporation;

(3) immediately following the consummation of the offer, shares that are irrevocably accepted for purchase or exchange pursuant to the consummation of the offer and that are received by the depository before the expiration of the offer, together with the shares that are otherwise owned by the consummating organization or its qualified affiliates and any rollover shares, equal at least the percentage of the shares of the corporation, and of each class or series of those shares that, absent this subsection, would be required to approve the plan of merger by:

(A) Section 21.457 and, if applicable, Section 21.458; and

(B) the certificate of formation of the corporation;

(4) the organization consummating the offer or one of its qualified affiliates merges with or into the corporation pursuant to the plan of merger; and

(5) each outstanding share, other than excluded shares, of each class or series of the corporation that is the subject of and is not irrevocably accepted for purchase or exchange in the offer is to be converted or exchanged in the merger into, or into the right to receive, the same amount and kind of consideration, as described by Section 10.002(a)(5), as to be paid or delivered for shares of such class or series of the corporation irrevocably accepted for purchase or exchange in the offer.

(d) In Subsection (c) and this subsection and, as applicable, in Sections 10.355(d)(3)(B), 10.355(f), and 10.356(b)(3)(E)(iv):

(1) "Consummates," "consummation," or "consummating" means irrevocably accepts for purchase or exchange shares tendered pursuant to an offer.

(2) "Depository" means an agent appointed to facilitate consummation of an offer.

(3) "Offer" means a tender offer or an exchange offer that satisfies the requirements of Subsection (c)(2).

(e) For purposes of Subsection (c) and this subsection:

(1) "Excluded shares" means:

(A) shares of the corporation that are owned at the commencement of the offer by:

(i) the corporation;

(ii) the organization consummating the offer;

(iii) any person that owns, directly or indirectly, all of the outstanding ownership interests of the organization consummating the offer; or

(iv) any direct or indirect wholly owned subsidiary of the corporation, the organization consummating the offer, or any person described by Subparagraph (iii); and

(B) rollover shares.

(2) "Qualified affiliate" means, with respect to the organization consummating an offer, any person that:

(A) owns, directly or indirectly, all of the outstanding ownership interests of the organization consummating the offer; or

(B) is a direct or indirect wholly owned subsidiary of the organization consummating the offer or of any person described by Paragraph (A).

(3) "Received" means:

(A) with respect to certificated shares, physical receipt of a certificate representing shares accompanied by an executed letter of transmittal;

(B) transfer into the depository's account by means of an agent's message; and

(C) with respect to uncertificated shares held of record by a person other than a clearing corporation as nominee, physical receipt of an executed letter of transmittal by the depository.

(4) "Rollover shares" means any shares of the corporation that are the subject of a written agreement, separate from the offer, requiring the shares to be transferred, contributed, or delivered to the organization consummating the offer or any of the organization's qualified affiliates in exchange for ownership interests in the organization consummating the offer or a qualified affiliate of that organization. The term does not include shares of a corporation described by this subdivision that, immediately before the time a merger described by Subsection (c) becomes effective, have not been transferred, contributed, or delivered to the organization consummating the offer or any of the organization's qualified affiliates pursuant to the written agreement.

(f) For purposes of Subsections (c) and (e), shares cease to be "received":

(1) with respect to certificated shares, if the certificate representing the shares was canceled before consummation of the offer; and

(2) with respect to uncertificated shares, to the extent the uncertificated shares have been reduced or eliminated due to any sale of those shares before the consummation of the offer.

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

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860), Sec. 26, eff. September 1, 2015.

Acts 2019, 86th Leg., R.S., Ch. 665 (S.B. 1971), Sec. 8, eff. September 1, 2019.