Connecticut Seal

Senate Bill No. 135

Public Act No. 04-50

AN ACT MAKING TECHNICAL CHANGES TO CERTAIN PROVISIONS CONCERNING CORPORATION MERGERS AND SHARE EXCHANGES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 33-815 of the general statutes, as amended by section 18 of public act 03-18 and section 10 of public act 03-158, is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) One or more domestic corporations may, in accordance with the provisions of this section, merge with a domestic or foreign corporation or other entity pursuant to a plan of merger.

(b) A foreign corporation, or a domestic or foreign other entity, may be a party to a merger, or may be created by the terms of a plan of merger, only if: (1) The merger is permitted by the law of the state or country under which such corporation or other entity is organized or by which it is governed; and (2) in effecting the merger, such corporation or other entity complies with such law and with its certificate of incorporation or organizational documents.

(c) The plan of merger must include: (1) The name of each corporation or other entity that will merge and the name of the corporation or other entity that will be the survivor of the merger; (2) the terms and conditions of the merger; (3) the manner and basis of converting the shares of each merging corporation and interests of each merging other entity into shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property, or any combination thereof; (4) the certificate of incorporation of any corporation, or the organizational documents of any other entity, to be created by the merger or, if a new corporation or other entity is not to be created by the merger, any amendments to the survivor's certificate of incorporation or organizational documents; and (5) any other provisions required by the law of the state or country under which any party to the merger is organized or by which it is governed, or by the certificate of incorporation or organizational documents of any such party.

[(d) The terms of the plan of merger described in subdivisions (2) and (3) of subsection (c) of this section may be made dependent upon facts ascertainable outside the plan of merger, provided such facts are objectively ascertainable. For the purposes of this subsection, "facts" includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation. ]

(d) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (l) of section 33-608, as amended.

(e) The plan of merger may also include a provision that the plan may be amended prior to filing a certificate of merger with the Secretary of the State, provided, if the shareholders of a domestic corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that, subsequent to approval of the plan by such shareholders, the plan may not be amended to: (1) Change the amount or kind of shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property to be received by the shareholders of or owners of interests in any party to the merger upon conversion of their shares or interests under the plan; (2) change the certificate of incorporation of any corporation, or the organizational documents of any other entity, that will survive or be created as a result of the merger, except for changes permitted by section 33-796, as amended, or by comparable provisions of the law of the state or country under which the foreign corporation or foreign other entity is organized or by which it is governed; or (3) change any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

[(f) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (l) of section 33-608. ]

Sec. 2. Section 33-816 of the general statutes, as amended by section 19 of public act 03-18 and section 11 of public act 03-158, is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Through a share exchange: (1) A domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic corporation or of a foreign corporation, or all of the interests of one or more classes or series of interests of a domestic or foreign other entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property, or any combination thereof, pursuant to a plan of share exchange; or (2) all of the shares of one or more classes or series of shares of a domestic corporation may be acquired by another domestic corporation or by a foreign corporation or other entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property, or any combination thereof, pursuant to a plan of share exchange.

(b) A foreign corporation, or a domestic or foreign other entity, may be a party to a share exchange only if: (1) The share exchange is permitted by the law of the state or country under which such corporation or other entity is organized or by which it is governed; and (2) in effecting the share exchange, such corporation or other entity complies with such law and with its certificate of incorporation or organizational documents.

(c) The plan of share exchange must include: (1) The name of each corporation or other entity whose shares or interests will be acquired and the name of the corporation or other entity that will acquire such shares or interests; (2) the terms and conditions of the share exchange; (3) the manner and basis of exchanging shares of a corporation or interests in an other entity whose shares or interests will be acquired under the share exchange into shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property, or any combination thereof; and (4) any other provisions required by the law of the state or country under which any party to the share exchange is organized or by which it is governed or by the certificate of incorporation or organizational documents of any such party.

[(d) The terms of the plan of share exchange described in subdivisions (2) and (3) of subsection (c) of this section may be made dependent on facts ascertainable outside the plan of share exchange, provided such facts are objectively ascertainable. For the purposes of this subsection, "facts" includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation. ]

(d) Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (l) of section 33-608, as amended.

(e) The plan of share exchange may also include a provision that the plan may be amended prior to the filing of a certificate of share exchange with the Secretary of the State, provided, if the shareholders of a domestic corporation that is a party to the share exchange are required or permitted to vote on the plan, the plan must provide that, subsequent to approval of the plan by such shareholders, the plan may not be amended to: (1) Change the amount or kind of shares or other securities, interests, obligations, rights to acquire shares or other securities, cash or other property to be issued by the corporation or to be received by the shareholders of or owners of interests in any party to the share exchange in exchange for their shares or interests under the plan; or (2) change any of the terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

[(f) Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (l) of section 33-608. ]

[(g)] (f) This section does not limit the power of a domestic corporation to acquire shares of another corporation or interests in an other entity in a transaction other than a share exchange.

Approved May 4, 2004