2023 New York Laws › BSC - Business Corporation › Article 9 - Merger or Consolidation; Guarantee; Disposition of Assets; Share Exchanges › 913 - Share Exchanges.

§ 913. Share exchanges.
(a) (1)  Two  domestic  corporations may, as provided in this section,
participate in the consummation of a plan for binding share exchanges.
(2) Whenever used in this article:
(A) "Acquiring corporation" means a corporation that is  participating
in  a  procedure  pursuant to which such corporation is acquiring all of
the outstanding shares of one or more classes of a subject corporation.
(B) "Subject corporation" means a corporation that is participating in
a procedure pursuant to which all of the outstanding shares  of  one  or
more  classes  of  such  corporation  are being acquired by an acquiring
corporation.
(b) The board of the  acquiring  corporation  and  the  board  of  the
subject corporation shall adopt a plan of exchange, setting forth:
(1) The  name of the acquiring corporation and the name of the subject
corporation, and, if the name of either of them has  been  changed,  the
name under which it was formed;
(2) As  to  the acquiring corporation and the subject corporation, the
designation and number of outstanding shares of each class  and  series,
specifying   the  classes  and  series  entitled  to  vote  and  further
specifying each class and series, if any, entitled to vote as  a  class;
and,  if the number of any such shares is subject to change prior to the
effective date of the exchange, the manner  in  which  such  change  may
occur;
(3) The  terms  and conditions of the proposed exchange, including the
manner and basis of exchanging the shares to  be  acquired  for  shares,
bonds  or  other securities of the acquiring corporation, or the cash or
other consideration to be paid or delivered in exchange for such  shares
to be acquired, or a combination thereof; and
(4) Such other provisions with respect to the proposed exchange as the
board considers necessary or desirable.
(c) The  board  of  the subject corporation, upon adopting the plan of
exchange, shall submit such plan, except as provided in paragraph (g) of
this  section,  to  a  vote  of  shareholders  in  accordance  with  the
following:
(1) Notice of meeting shall be given to each shareholder of record, as
of  the  record date fixed pursuant to section 604 (Fixing record date),
whether or not entitled to vote. A copy of the plan of  exchange  or  an
outline  of  the  material  features  of  the  plan shall accompany such
notice.
(2) (A) The plan  of  exchange  shall  be  adopted  at  a  meeting  of
shareholders  by  (i)  for any corporation in existence on the effective
date of subclause (ii) of this clause, two-thirds of the  votes  of  all
outstanding shares entitled to vote thereon and (ii) for any corporation
in  existence on the effective date of this subclause the certificate of
incorporation of which expressly provides such and for  any  corporation
incorporated  after  the effective date of this subclause, a majority of
the  votes  of  all  outstanding  shares  entitled  to   vote   thereon.
Notwithstanding  any  provision in the certificate of incorporation, the
holders of shares of a class or series of a class shall be  entitled  to
vote  together  and to vote as a separate class if both of the following
conditions are satisfied:
1. Such  shares  will  be  converted  into  shares  of  the  acquiring
corporation, and
2.  The  certificate  or  articles  of  incorporation of the acquiring
corporation immediately after  the  share  exchange  would  contain  any
provision  which is not contained in the certificate of incorporation of
the subject corporation and which, if contained in an amendment  to  the
certificate  of  incorporation of the subject corporation, would entitle

the holders of shares of such class or such one or more series  to  vote
and  to  vote as a separate class thereon pursuant to section 804 (Class
voting on amendment).
In  such case, in addition to the authorization of the exchange by the
proportion of votes indicated above of all outstanding  shares  entitled
to  vote  thereon, the exchange shall be authorized by a majority of the
votes of all outstanding shares of the  class  entitled  to  vote  as  a
separate  class.  If  any  provision  referred to in subclause 2 of this
clause (A) would affect the rights of the holders of shares of only  one
or  more  series  of  any  class but not the entire class, then only the
holders of those series whose rights would be affected shall together be
considered a separate class for purposes of this section.
Notwithstanding shareholder authorization and at any time prior to the
filing of the certificate of exchange,  the  plan  of  exchange  may  be
abandoned  pursuant  to  a  provision  for  such  abandonment,  if  any,
contained in the plan of exchange.
(B) Any corporation may adopt  an  amendment  of  the  certificate  of
incorporation which provides that such plan of exchange shall be adopted
at  a  meeting  of the shareholders by vote of a specified proportion of
the holders of  outstanding  shares,  or  class  or  series  of  shares,
entitled  to vote thereon, provided that such proportion may not be less
than a majority and subject to the second sentence of  clause  (A)    of
this subparagraph (2).
(d) After  adoption  of  the  plan  of  exchange  by  the board of the
acquiring corporation and the board of the subject  corporation  and  by
the  shareholders  of  the subject corporation entitled to vote thereon,
unless the exchange is abandoned in accordance  with  paragraph  (c),  a
certificate  of exchange, entitled "Certificate of exchange of shares of
..............,  subject  corporation,  for  shares  of   .............,
acquiring  corporation, or other consideration, under section 913 of the
Business Corporation Law", shall be signed on behalf of each corporation
and delivered to the department of state. It shall set forth:
(1) the statements required by subparagraphs (1) and (2) of  paragraph
(b) of this section;
(2) the  effective  date  of  the  exchange  if other than the date of
filing of the certificate of exchange by the department of state;
(3) the date when the certificate of incorporation of each corporation
was filed by the department of state;
(4) the designation of the shares to  be  acquired  by  the  acquiring
corporation and a statement of the consideration for such shares; and
(5) the  manner  in  which the exchange was authorized with respect to
each corporation.
(e) Upon the filing of the certificate of exchange by  the  department
of  state or on such date subsequent thereto, not to exceed thirty days,
as shall be set  forth  in  such  certificate,  the  exchange  shall  be
effected.  When such exchange has been effected, ownership of the shares
to  be  acquired  pursuant  to  the  plan  of exchange shall vest in the
acquiring corporation, whether or not the certificates for  such  shares
have  been surrendered for exchange, and the acquiring corporation shall
be entitled to have new certificates registered in its name  or  at  its
direction.  Shareholders whose shares have been so acquired shall become
entitled to the shares, bonds  or  other  securities  of  the  acquiring
corporation,  or the cash or other consideration, required to be paid or
delivered in exchange for such shares pursuant to the plan.  Subject  to
any  terms  of  the plan regarding surrender of certificates theretofore
evidencing  the  shares  so  acquired   and   regarding   whether   such
certificates  shall  thereafter  evidence  securities  of  the acquiring
corporation, such certificates shall thereafter evidence only the  right

to  receive  the  consideration  required  to  be  paid  or delivered in
exchange for such shares pursuant  to  the  plan  or,  in  the  case  of
dissenting  shareholders,  their  rights  under  section  910  (Right of
shareholder  to receive payment for shares upon merger or consolidation,
or sale, lease, exchange  or  other  disposition  of  assets,  or  share
exchange)  and  section 623 (Procedure to enforce shareholder's right to
receive payment for shares).
(f) (1)  A  foreign  corporation  and  a  domestic   corporation   may
participate  in  a  share exchange, but, if the subject corporation is a
foreign corporation, only if such exchange is permitted by the  laws  of
the  jurisdiction  under which such foreign corporation is incorporated.
With respect to such exchange, any  reference  in  subparagraph  (2)  of
paragraph (a) of this section to a corporation shall, unless the context
otherwise  requires, include both domestic and foreign corporations, and
the provisions of paragraphs (b), (c), (d) and (e) of this section shall
apply, except to the extent otherwise provided in this paragraph.
(2) With  respect  to  procedure,   including   the   requirement   of
shareholder  authorization, a domestic corporation shall comply with the
provisions of this chapter relating to share exchanges in which domestic
corporations are participating, and a foreign corporation  shall  comply
with  the  applicable  provisions  of  the law of the jurisdiction under
which it is incorporated.
(3) If  the  subject  corporation  is  a  foreign   corporation,   the
certificate  of  exchange  shall  set  forth, in addition to the matters
specified in paragraph (d), the jurisdiction and date  of  incorporation
of  such  corporation  and a statement that the exchange is permitted by
the laws of the jurisdiction of such corporation and  is  in  compliance
therewith.
(g) (1)  Any  corporation  owning  at  least  ninety  percent  of  the
outstanding  common  shares,  having  full  voting  rights,  of  another
corporation  may  acquire  by exchange the remainder of such outstanding
common shares, without the authorization of the shareholders of any such
corporation and with the effect provided for in paragraph  (e)  of  this
section.  The  board  of the acquiring corporation shall adopt a plan of
exchange, setting forth the matters specified in paragraph (b)  of  this
section.  A  copy of such plan of exchange or an outline of the material
features thereof shall be given, personally or by mail, to  all  holders
of shares of the subject corporation that are not owned by the acquiring
corporation,  unless  the giving of such copy or outline has been waived
by such holders.
(2) A certificate of exchange, entitled "Certificate  of  exchange  of
shares  of  ..........,  subject  corporation, for shares of ..........,
acquiring corporation, or other consideration, under  paragraph  (g)  of
section  913  of  the  Business  Corporation Law" and complying with the
provisions of paragraph (d) and,  if  applicable,  subparagraph  (3)  of
paragraph  (f) shall be signed, verified and delivered to the department
of state by the acquiring corporation, but not  less  than  thirty  days
after  the  giving  of a copy or outline of the material features of the
plan of exchange to shareholders of the subject corporation, or  at  any
time  after  the  waiving  thereof by the holders of all the outstanding
shares  of  the  subject  corporation  not  owned   by   the   acquiring
corporation.
(3) The  right  of  exchange  of  shares  granted by this paragraph to
certain  corporations  shall  not  preclude   the   exercise   by   such
corporations of any other right of exchange under this article.
(4) The  procedure for the exchange of shares of a subject corporation
under this paragraph (g) of this section shall be available where either
the subject corporation  or  the  acquiring  corporation  is  a  foreign

corporation,   and,  in  case  the  subject  corporation  is  a  foreign
corporation, where such  exchange  is  permitted  by  the  laws  of  the
jurisdiction under which such foreign corporation is incorporated.
(h) This  section  does  not  limit the power of a domestic or foreign
corporation to acquire all or part of the shares of one or more  classes
of  another  domestic  or  foreign  corporation  by means of a voluntary
exchange or otherwise.
(i) (1) A binding  share  exchange  pursuant  to  this  section  shall
constitute  a  "business  combination"  pursuant to section nine hundred
twelve of  this  chapter  (Requirements  relating  to  certain  business
combinations)  if  the subject corporation is a domestic corporation and
the acquiring corporation is an "interested shareholder" of the  subject
corporation,  as  such term is defined in section nine hundred twelve of
this chapter.
(2) With  respect  to  convertible  securities  and  other  securities
evidencing a right to acquire shares of a subject corporation, a binding
share  exchange  pursuant  to this section shall have the same effect on
the rights of the holders of such securities as a merger of the  subject
corporation.
(3) A  binding  share  exchange  pursuant  to  this  section  which is
effectuated on or after September first, nineteen hundred ninety-one  is
intended  to  have  the  same  effect as a "merger" in which the subject
corporation is a  surviving  corporation,  within  the  meaning  of  any
provision  of the certificate of incorporation, bylaws or other contract
or instrument by which the subject corporation was  bound  on  September
first, nineteen hundred eighty-six, unless it is apparent on the face of
such  instrument  that  the  term "merger" was not intended to include a
binding share exchange.