Section 3-106 - Procedure for merger of subsidiary corporation if charter of parent not amended.
§ 3-106. Procedure for merger of subsidiary corporation if charter of parent not amended.
(a) Applicability of section.- Notwithstanding the provisions of § 3-105 of this subtitle, the merger of a 90 percent or more owned subsidiary corporation with or into its parent corporation may be effected as provided in this section if:
(1) The charter of the successor is not amended in the merger other than to change its name, the name or other designation or the par value of any class or series of its stock, or the aggregate par value of its stock; and
(2) The contract rights of any stock of the successor issued in the merger in exchange for stock of the other corporation participating in the merger are identical to the contract rights of the stock for which the stock of the successor was exchanged.
(b) "Subsidiary" defined.- For the purposes of this section, a subsidiary is considered to be 90 percent or more owned if the parent corporation owns shares entitled to cast 90 percent or more of all the votes entitled to be cast of each group or class of shares entitled to vote as a group or class on the merger.
(c) Procedure.-
(1) The board of directors of each Maryland corporation proposing to become a party to the merger shall adopt a resolution which approves the proposed merger on substantially the terms and conditions set forth or referred to in the resolution. The approval shall be by a majority vote of the entire board of directors. A meeting of the stockholders is not necessary.
(2) If a foreign corporation is a party to the articles, the transaction shall be advised, authorized, and approved by the corporation in the manner and by the vote required by its charter and the laws of the place where it is organized.
(d) Rights of minority stockholder.-
(1) Unless waived by all stockholders who, except for the application of this section, would be entitled to vote on the merger, at least 30 days before the articles are filed with the Department, a parent corporation which owns less than all of the outstanding stock of the subsidiary as of immediately before the effective time of the merger must have given notice of the transaction to each of the subsidiary's stockholders of record who, except for the application of this section, would be entitled to vote on the merger on the date of giving of the notice or on a record date fixed for that purpose which is not more than 10 days before the date of giving notice.
(2) A minority stockholder of the subsidiary has the right to demand and receive payment of the fair value of the minority stockholder's stock as, and to the extent, provided in Subtitle 2 of this title relating to objecting stockholders.
[An. Code 1957, art. 23, § 67; 1975, ch. 311, § 2; 1976, ch. 567, § 2; 1999, ch. 395; 2000, ch. 642; 2003, ch. 301.]