MD. Corporations and Associations Code Ann. §  3-106.2 (2021)
2021 Maryland Statutes|Corporations and Associations|Title 3 - Corporations in General -- Extraordinary Actions|Subtitle 1 - Consolidation, Merger, and Transfer of Assets|Section 3-106.2 - Formation of Holding Company by Merger

    (a)    In this section, “holding company” means a Maryland corporation:        (1)    That, from its formation until consummation of a merger governed by this section, has been at all times a direct or indirect wholly owned subsidiary corporation; and        (2)    All of the shares of stock of which are issued in the merger.    (b)    Notwithstanding § 3–105 of this subtitle, unless the charter of a parent corporation expressly provides otherwise, a vote of the stockholders of the parent corporation is not necessary to authorize a merger with or into a single direct or indirect wholly owned subsidiary corporation of the parent corporation if:        (1)    The parent corporation and the direct or indirect wholly owned subsidiary corporation are the only parties to the merger;        (2)    Each share or fraction of a share of the stock of the parent corporation outstanding immediately prior to the effective time of the merger is converted in the merger into a share or equal fraction of a share of the stock of a holding company having the same contract rights as the share of stock of the parent corporation being converted in the merger;        (3)    The holding company, the parent corporation, and the direct or indirect wholly owned subsidiary corporation that is the other party to the merger are Maryland corporations;        (4)    The charter and bylaws of the holding company immediately following the effective time of the merger are identical to the charter and bylaws of the parent corporation in effect immediately prior to the effective time of the merger, other than:            (i)    Provisions, if any, regarding the incorporator or incorporators, the principal office, the resident agent, and the initial board of directors;            (ii)    Provisions authorized under § 2–605 of this article; and            (iii)    Any amendment to the charter that was necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of stock, if the change, exchange, reclassification, subdivision, combination, or cancellation of stock has become effective;        (5)    As a result of the merger, the parent corporation or its successor becomes a direct or indirect wholly owned subsidiary corporation of the holding company;        (6)    The directors of the parent corporation become or remain the directors of the holding company at the effective time of the merger;        (7)    The stockholders of the parent corporation do not recognize gain or loss for federal income tax purposes, as determined by the board of directors of the parent corporation; and        (8)    A majority of the entire board of directors of the parent corporation approves the merger.    (c)    From and after the effective time of a merger under subsection (b) of this section:        (1)    If the parent corporation was formed before October 1, 1995, and its charter did not expressly terminate preemptive rights, and the holding company was formed on or after October 1, 1995, the charter of the holding company shall provide that stockholders of the holding company have preemptive rights, to the extent provided in the charter of the parent corporation immediately prior to the effective time of the merger and subject to § 2–205 of this article, to subscribe to any additional shares of stock or any security convertible into an additional issue of stock;        (2)    To the extent a voting trust agreement authorized by § 2–510 of this article, a written agreement authorized by § 2–510.1 of this article, a proxy authorized by § 2–507 of this article, or any other similar agreement or instrument applied to the parent corporation, its stock, or its stockholders immediately prior to the effective time of the merger, the voting trust agreement, written agreement, proxy, or other similar agreement or instrument shall apply to the holding company, its stock, and its stockholders;        (3)    To the extent that the restrictions under § 3–602 of this title applied to the parent corporation and the stockholders of the parent corporation immediately prior to the effective time of the merger:            (i)    The restrictions shall apply to the holding company and the stockholders of the holding company immediately after the effective time of the merger as though the holding company was the parent company;            (ii)    For purposes of § 3–602 of this title, all shares of stock of the holding company acquired in the merger shall be deemed to have been acquired at the time that the shares of stock of the parent corporation converted in the merger were acquired; and            (iii)    1.    Any stockholder that immediately prior to the effective time of the merger was not an interested stockholder, as defined in § 3–601 of this title, does not, solely by reason of the merger, become an interested stockholder of the holding company; and                2.    Any stockholder that immediately prior to the effective time of the merger was an interested stockholder, as defined in § 3–601 of this title, remains an interested stockholder of the holding company;        (4)    To the extent that, immediately prior to the effective time of the merger, any approval by the stockholders of the parent corporation under § 3–702(a) of this title applied to the parent corporation and any control shares of the parent corporation, the approval shall apply to the holding company and any control shares of the holding company immediately after the effective time of the merger as if the holding company were the parent corporation;        (5)    To the extent that, immediately prior to the effective time of the merger, the board of directors of the parent corporation had elected by resolution to be subject to or not to be subject to, wholly or partly, any or all provisions of Subtitle 8 of this title, the election shall apply to the holding company immediately after the effective time of the merger as if the holding company were the parent corporation;        (6)    Unless the board of directors of the holding company has authorized shares of stock of the holding company to be issued without certificates, or until certificates with the name of the holding company have been issued, the shares of stock of the holding company into which the shares of stock of the parent corporation are converted in the merger may continue to be represented by the stock certificates that previously represented shares of stock of the parent corporation; and        (7)    To the extent that a stockholder of the parent corporation immediately prior to the effective time of the merger had standing to institute or maintain derivative litigation on behalf of the parent corporation, the stockholder shall have standing to institute or maintain derivative litigation on behalf of the holding company.