Fundamental Changes – BTIs
A.  amendment of aoi
- 2/3 of all shares entitled to vote
B.  merger
- ZAP, Inc. could merge with Terminix, Inc. => everything of ZAP is absorbed into Terminix
- Plan of Merger:  who are the merging parties, terms, who survives the merger
- effect on ZAP SHs:  they can’t own ZAP stock anymore b/c ZAP won’t exist (sometimes $ sometimes new mergers shares, etc.  the merger plan decides this)
- approval: (gets approved by both corp’s SHs)
- plan of merger
- acted on by BOD  (BOD could block by not submitted vote to SHs)
- SH 2/3 vote (of all entitled to vote!)
- file articles of merger
- surviving corporation’s exceptions:  if its a small merger that doesn’t affect the Survivor too much & dependent upon the plan of merger, then we can get around a SH vote
- SH hold same no. of shares
- doesn’t change voting proportions by more than 20%
- SH’s right to dissent
- appraisal =>
- gets fair value on his shares
- you can merge a subsidiary into a parent; this also gets around SH approval (unless over 10% of the sub’s shares are not owned by Terminix)
C.  share exchange
1. just like the triangular merger
2. is a more direct way for ZAP to merge under Terminix w/o Term having to set up the subsidiary
3. it’s a way for Terminix to force all the ZAP SH’s to sell them their shares (but only req’s a 2/3 vote)
D.  sale of substantially all the assets outside the ord. course of bsns  [outside scope = not going to continue any bsns]
- use this if the parent doesn’t want to acquire any debts/liabilites of little corp.; they just want the assets and to acquire it as a going concern
- process:
- ZAP sells assets to Terminix; could even include selling its name to Terminix.
- Terminix gives cash to ZAP.
- ZAP, Inc. will usually dissolve, pay out the ¢ recv’d from sale, to the SHs.  (Dissolution also requres 2/3 approval.)
- bod must submit and 2/3 must approve (if P doesn’t want to => dissent & appraisal)
- successor liability***what about later arising liabilities???  too bad b/c Texas does not recognize ‘de facto’ mergers!
- what if tort occurs from product after dissolution?  you can’s sue anyone
E.  Conversion
1. plan of conversion converst Inc. into an LLP
2. BOD submits, 2/3 vote
3. SHs can dissent
4. file art. of conversion & you’re done!
F.  Dissolution
1. BOD submits; 2/3 vote of SHs
2. pay off creditors/liabilities
3. then SHs split up rest of $