!Creation Date: 09/15/22> <!Author: Arizona Legislative Council> <!Typist: dbupdate>
10-1103. Action on plan
A. Except as provided in subsection G of this section, after adopting a plan, the board of directors of a domestic corporation that is a party to or that is otherwise undertaking the transaction and, in the case of a domestic corporation whose shares will be acquired in an interest exchange, the board of directors of the corporation whose shares will be acquired in the interest exchange shall submit the plan for approval by its shareholders.
B. For a plan to be approved, both:
1. The board of directors shall recommend the plan to the shareholders, unless the board of directors determines that because of a conflict of interest or other special circumstances it should not make a recommendation and communicates the basis for its determination to the shareholders with the plan.
2. The shareholders entitled to vote on the plan shall approve the plan.
C. The board of directors may condition its submission of the plan on any basis.
D. The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting at which the plan is to be submitted for approval in accordance with section 10-705. The notice shall state that the purpose or one of the purposes of the meeting is to consider the plan and shall contain or be accompanied by a copy or summary of the plan.
E. Unless chapters 1 through 17 of this title, the articles of incorporation or the board of directors acting pursuant to subsection C of this section requires a greater vote or a vote by voting groups, the plan to be authorized shall be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.
F. Separate voting by voting groups is required:
1. On a plan, other than a plan of interest exchange, if either:
(a) The plan contains a provision that, if contained in a proposed amendment to the articles of incorporation, would require action by one or more separate voting groups on the proposed amendment under section 10-1004.
(b) One or more voting groups are entitled under the articles of incorporation to vote as a voting group on the plan.
2. On a plan of interest exchange by each class or series of shares included in the exchange, with each class or series constituting a separate voting group.
G. Unless the articles of incorporation otherwise require, action by the shareholders of a domestic corporation that is the surviving corporation on a plan of merger is not required if all of the following conditions exist:
1. The articles of incorporation of the surviving corporation will not differ, except for amendments enumerated in section 10-1002, from its articles of incorporation before the merger.
2. Each shareholder of the surviving 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 immediately after the effective date of the merger.
3. The number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than twenty per cent the total number of voting shares of the surviving corporation outstanding immediately before the merger.
4. The number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than twenty per cent the total number of participating shares outstanding immediately before the merger.
H. For the purposes of subsection G of this section:
1. "Participating shares" means shares that entitle their holders to participate without limitation in distributions.
2. "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.