N.Y. BSC Law § 913 — New York Code / Act BSC / Article 9 / Section 913
Share exchanges
Status: in_force

§ 913. Share exchanges.\n  (a) (1) Two domestic corporations may, as provided in this section,\nparticipate in the consummation of a plan for binding share exchanges.\n  (2) Whenever used in this article:\n  (A) "Acquiring corporation" means a corporation that is participating\nin a procedure pursuant to which such corporation is acquiring all of\nthe outstanding shares of one or more classes of a subject corporation.\n  (B) "Subject corporation" means a corporation that is participating in\na procedure pursuant to which all of the outstanding shares of one or\nmore classes of such corporation are being acquired by an acquiring\ncorporation.\n  (b) The board of the acquiring corporation and the board of the\nsubject corporation shall adopt a plan of exchange, setting forth:\n  (1) The name of the acquiring corporation and the name of the subject\ncorporation, and, if the name of either of them has been changed, the\nname under which it was formed;\n  (2) As to the acquiring corporation and the subject corporation, the\ndesignation and number of outstanding shares of each class and series,\nspecifying the classes and series entitled to vote and further\nspecifying each class and series, if any, entitled to vote as a class;\nand, if the number of any such shares is subject to change prior to the\neffective date of the exchange, the manner in which such change may\noccur;\n  (3) The terms and conditions of the proposed exchange, including the\nmanner and basis of exchanging the shares to be acquired for shares,\nbonds or other securities of the acquiring corporation, or the cash or\nother consideration to be paid or delivered in exchange for such shares\nto be acquired, or a combination thereof; and\n  (4) Such other provisions with respect to the proposed exchange as the\nboard considers necessary or desirable.\n  (c) The board of the subject corporation, upon adopting the plan of\nexchange, shall submit such plan, except as provided in paragraph (g) of\nthis section, to a vote of shareholders in accordance with the\nfollowing:\n  (1) Notice of meeting shall be given to each shareholder of record, as\nof the record date fixed pursuant to section 604 (Fixing record date),\nwhether or not entitled to vote. A copy of the plan of exchange or an\noutline of the material features of the plan shall accompany such\nnotice.\n  (2) (A) The plan of exchange shall be adopted at a meeting of\nshareholders by (i) for any corporation in existence on the effective\ndate of subclause (ii) of this clause, two-thirds of the votes of all\noutstanding shares entitled to vote thereon and (ii) for any corporation\nin existence on the effective date of this subclause the certificate of\nincorporation of which expressly provides such and for any corporation\nincorporated after the effective date of this subclause, a majority of\nthe votes of all outstanding shares entitled to vote thereon.\nNotwithstanding any provision in the certificate of incorporation, the\nholders of shares of a class or series of a class shall be entitled to\nvote together and to vote as a separate class if both of the following\nconditions are satisfied:\n  1. Such shares will be converted into shares of the acquiring\ncorporation, and\n  2. The certificate or articles of incorporation of the acquiring\ncorporation immediately after the share exchange would contain any\nprovision which is not contained in the certificate of incorporation of\nthe subject corporation and which, if contained in an amendment to the\ncertificate of incorporation of the subject corporation, would entitle\nthe holders of shares of such class or such one or more series to vote\nand to vote as a separate class thereon pursuant to section 804 (Class\nvoting on amendment).\n  In such case, in addition to the authorization of the exchange by the\nproportion of votes indicated above of all outstanding shares entitled\nto vote thereon, the exchange shall be authorized by a majority of the\nvotes of all outstanding shares of the class entitled to vote as a\nseparate class. If any provision referred to in subclause 2 of this\nclause (A) would affect the rights of the holders of shares of only one\nor more series of any class but not the entire class, then only the\nholders of those series whose rights would be affected shall together be\nconsidered a separate class for purposes of this section.\n  Notwithstanding shareholder authorization and at any time prior to the\nfiling of the certificate of exchange, the plan of exchange may be\nabandoned pursuant to a provision for such abandonment, if any,\ncontained in the plan of exchange.\n  (B) Any corporation may adopt an amendment of the certificate of\nincorporation which provides that such plan of exchange shall be adopted\nat a meeting of the shareholders by vote of a specified proportion of\nthe holders of outstanding shares, or class or series of shares,\nentitled to vote thereon, provided that such proportion may not be less\nthan a majority and subject to the second sentence of clause (A)  of\nthis subparagraph (2).\n  (d) After adoption of the plan of exchange by the board of the\nacquiring corporation and the board of the subject corporation and by\nthe shareholders of the subject corporation entitled to vote thereon,\nunless the exchange is abandoned in accordance with paragraph (c), a\ncertificate of exchange, entitled "Certificate of exchange of shares of\n..............., subject corporation, for shares of .............,\nacquiring corporation, or other consideration, under section 913 of the\nBusiness Corporation Law", shall be signed on behalf of each corporation\nand delivered to the department of state. It shall set forth:\n  (1) the statements required by subparagraphs (1) and (2) of paragraph\n(b) of this section;\n  (2) the effective date of the exchange if other than the date of\nfiling of the certificate of exchange by the department of state;\n  (3) the date when the certificate of incorporation of each corporation\nwas filed by the department of state;\n  (4) the designation of the shares to be acquired by the acquiring\ncorporation and a statement of the consideration for such shares; and\n  (5) the manner in which the exchange was authorized with respect to\neach corporation.\n  (e) Upon the filing of the certificate of exchange by the department\nof state or on such date subsequent thereto, not to exceed thirty days,\nas shall be set forth in such certificate, the exchange shall be\neffected.  When such exchange has been effected, ownership of the shares\nto be acquired pursuant to the plan of exchange shall vest in the\nacquiring corporation, whether or not the certificates for such shares\nhave been surrendered for exchange, and the acquiring corporation shall\nbe entitled to have new certificates registered in its name or at its\ndirection. Shareholders whose shares have been so acquired shall become\nentitled to the shares, bonds or other securities of the acquiring\ncorporation, or the cash or other consideration, required to be paid or\ndelivered in exchange for such shares pursuant to the plan. Subject to\nany terms of the plan regarding surrender of certificates theretofore\nevidencing the shares so acquired and regarding whether such\ncertificates shall thereafter evidence securities of the acquiring\ncorporation, such certificates shall thereafter evidence only the right\nto receive the consideration required to be paid or delivered in\nexchange for such shares pursuant to the plan or, in the case of\ndissenting shareholders, their rights under section 910 (Right of\nshareholder to receive payment for shares upon merger or consolidation,\nor sale, lease, exchange or other disposition of assets, or share\nexchange) and section 623 (Procedure to enforce shareholder's right to\nreceive payment for shares).\n  (f) (1) A foreign corporation and a domestic corporation may\nparticipate in a share exchange, but, if the subject corporation is a\nforeign corporation, only if such exchange is permitted by the laws of\nthe jurisdiction under which such foreign corporation is incorporated.\nWith respect to such exchange, any reference in subparagraph (2) of\nparagraph (a) of this section to a corporation shall, unless the context\notherwise requires, include both domestic and foreign corporations, and\nthe provisions of paragraphs (b), (c), (d) and (e) of this section shall\napply, except to the extent otherwise provided in this paragraph.\n  (2) With respect to procedure, including the requirement of\nshareholder authorization, a domestic corporation shall comply with the\nprovisions of this chapter relating to share exchanges in which domestic\ncorporations are participating, and a foreign corporation shall comply\nwith the applicable provisions of the law of the jurisdiction under\nwhich it is incorporated.\n  (3) If the subject corporation is a foreign corporation, the\ncertificate of exchange shall set forth, in addition to the matters\nspecified in paragraph (d), the jurisdiction and date of incorporation\nof such corporation and a statement that the exchange is permitted by\nthe laws of the jurisdiction of such corporation and is in compliance\ntherewith.\n  (g) (1) Any corporation owning at least ninety percent of the\noutstanding common shares, having full voting rights, of another\ncorporation may acquire by exchange the remainder of such outstanding\ncommon shares, without the authorization of the shareholders of any such\ncorporation and with the effect provided for in paragraph (e) of this\nsection. The board of the acquiring corporation shall adopt a plan of\nexchange, setting forth the matters specified in paragraph (b) of this\nsection. A copy of such plan of exchange or an outline of the material\nfeatures thereof shall be given, personally or by mail, to all holders\nof shares of the subject corporation that are not owned by the acquiring\ncorporation, unless the giving of such copy or outline has been waived\nby such holders.\n  (2) A certificate of exchange, entitled "Certificate of exchange of\nshares of .........., subject corporation, for shares of ..........,\nacquiring corporation, or other consideration, under paragraph (g) of\nsection 913 of the Business Corporation Law" and complying with the\nprovisions of paragraph (d) and, if applicable, subparagraph (3) of\nparagraph (f) shall be signed, verified and delivered to the department\nof state by the acquiring corporation, but not less than thirty days\nafter the giving of a copy or outline of the material features of the\nplan of exchange to shareholders of the subject corporation, or at any\ntime after the waiving thereof by the holders of all the outstanding\nshares of the subject corporation not owned by the acquiring\ncorporation.\n  (3) The right of exchange of shares granted by this paragraph to\ncertain corporations shall not preclude the exercise by such\ncorporations of any other right of exchange under this article.\n  (4) The procedure for the exchange of shares of a subject corporation\nunder this paragraph (g) of this section shall be available where either\nthe subject corporation or the acquiring corporation is a foreign\ncorporation, and, in case the subject corporation is a foreign\ncorporation, where such exchange is permitted by the laws of the\njurisdiction under which such foreign corporation is incorporated.\n  (h) This section does not limit the power of a domestic or foreign\ncorporation to acquire all or part of the shares of one or more classes\nof another domestic or foreign corporation by means of a voluntary\nexchange or otherwise.\n  (i) (1) A binding share exchange pursuant to this section shall\nconstitute a "business combination" pursuant to section nine hundred\ntwelve of this chapter (Requirements relating to certain business\ncombinations) if the subject corporation is a domestic corporation and\nthe acquiring corporation is an "interested shareholder" of the subject\ncorporation, as such term is defined in section nine hundred twelve of\nthis chapter.\n  (2) With respect to convertible securities and other securities\nevidencing a right to acquire shares of a subject corporation, a binding\nshare exchange pursuant to this section shall have the same effect on\nthe rights of the holders of such securities as a merger of the subject\ncorporation.\n  (3) A binding share exchange pursuant to this section which is\neffectuated on or after September first, nineteen hundred ninety-one is\nintended to have the same effect as a "merger" in which the subject\ncorporation is a surviving corporation, within the meaning of any\nprovision of the certificate of incorporation, bylaws or other contract\nor instrument by which the subject corporation was bound on September\nfirst, nineteen hundred eighty-six, unless it is apparent on the face of\nsuch instrument that the term "merger" was not intended to include a\nbinding share exchange.\n