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Statutes Text

Article - Corporations and Associations




§3–106.1.

    (a)    (1)    In this section the following words have the meanings indicated.

        (2)    “Acquiring entity” means the Maryland corporation or other entity, as defined in § 3–901 of this title, consummating a tender or exchange offer under this section.

        (3)    “Consummate” means to irrevocably accept, for purchase or exchange, stock tendered in accordance with a tender or exchange offer.

        (4)    “Depository” means an agent appointed to consummate an offer described in this section.

        (5)    “Received” means:

            (i)    For certificated shares, physical receipt of a stock certificate and transfer of the stock certificate into the depository’s account; and

            (ii)    For uncertificated shares, receipt by the depository of confirmation of the transfer of the shares into the depository’s account.

        (6)    “Stockholder” includes a shareholder of a real estate investment trust.

        (7)    (i)    “Subject corporation” means the Maryland corporation that is the subject of a tender or exchange offer under this section.

            (ii)    “Subject corporation” includes a Maryland real estate investment trust as defined in Title 8 of this article.

    (b)    This section applies only to an agreement to merge that provides for the consummation of the merger on or after October 1, 2014.

    (c)    (1)    Notwithstanding § 3–105 of this subtitle, unless the charter of a corporation or declaration of trust of a real estate investment trust provides otherwise, a merger of a subject corporation with or into an acquiring entity is effected under this section if:

            (i)    The shares of the subject corporation are registered under the Securities Exchange Act of 1934 immediately prior to the execution of the agreement to merge by the subject corporation;

            (ii)    The agreement to merge expressly allows or requires the merger to be effected under this section and provides that the merger shall be effected following the consummation of the offer described in item (iii) of this paragraph;

            (iii)    Subject to paragraph (2) of this subsection, an acquiring entity consummates a tender or exchange offer for any and all of the outstanding shares of the subject corporation that would, except for the application of this section, entitle the holder of the outstanding shares to vote on the merger on the terms provided in the agreement to merge;

            (iv)    Following the consummation of the offer, the stock irrevocably accepted for purchase or exchange in accordance with the offer and received by the depository before the expiration of the offer, together with the stock otherwise owned by the acquiring entity, a person that owns, directly or indirectly, all of the outstanding equity interest in the acquiring entity, and a direct or indirect wholly owned subsidiary of the acquiring entity or a person that owns, directly or indirectly, all of the outstanding equity interest in the acquiring entity, equals at least that percentage of the shares, and of each class or series of the shares, of the subject corporation that would, except for the application of this section, be required to approve the merger under this article and the charter of the subject corporation;

            (v)    The acquiring entity merges with or into the subject corporation; and

            (vi)    Each outstanding share of each class or series of shares of the subject corporation that is the subject of and not irrevocably accepted for purchase or exchange in the offer is converted in the merger into, or into the right to receive, the same amount and kind of cash, property, rights, or securities paid for shares of the class or series of shares of the subject corporation irrevocably accepted for purchase or exchange in the offer.

        (2)    A tender or an exchange offer under paragraph (1)(iii) of this subsection may exclude stock of the subject corporation that is owned at the commencement of the offer by:

            (i)    The acquiring entity;

            (ii)    A person that owns, directly or indirectly, all of the outstanding equity interest in the acquiring entity; or

            (iii)    A direct or indirect wholly owned subsidiary of a person described in item (i) or (ii) of this paragraph.

    (d)    (1)    (i)    The board of directors of each Maryland corporation proposing to become a party to the merger shall adopt a resolution that approves the proposed merger on substantially the terms and conditions set forth or referred to in the resolution.

            (ii)    The approval shall be by a majority vote of the entire board of directors.

            (iii)    A meeting of the stockholders is not necessary.

        (2)    If an other entity, as defined in § 3–901 of this title, is a party to the merger, the transaction shall be advised, authorized, and approved by the other entity in the manner and by the vote required by its governing documents and the laws of the place where the other entity is organized.

    (e)    (1)    Unless waived by all stockholders who, except for the application of this section, would be entitled to vote on the merger, at least 20 business days before the articles are filed with the Department, an acquiring entity that owns less than all of the outstanding shares of the subject corporation as of immediately before the effective time of the merger must have given notice of the transaction to each of the subject corporation’s stockholders of record who, except for the application of this section, would be entitled to vote on the merger on the date that notice is given or on a record date fixed for that purpose that is not more than 10 days before the date that notice is given.

        (2)    A minority stockholder of the subject corporation has the right to demand and receive payment of the fair value of the minority stockholder’s shares as, and to the extent, provided in Subtitle 2 of this title relating to objecting stockholders.



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