75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 567
 
                         House Bill 2304
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of House Interim Committee on
  Judiciary for Oregon State Bar Business Law Section)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Eliminates requirement to notify and mail plan of merger to
certain shareholders in advance of merger of parent and
subsidiary corporations.
 
                        A BILL FOR AN ACT
Relating to corporate mergers; creating new provisions; and
  amending ORS 60.491 and 60.554.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 60.491 is amended to read:
  60.491. (1) A parent corporation owning at least 90 percent of
the outstanding shares of each class of a subsidiary corporation
may merge the subsidiary into   { - itself - }  { +  the
parent + }, or may merge   { - itself - }  { +  the parent + }
into the subsidiary, without approval of the shareholders of the
parent or subsidiary.
  (2) If the parent will be the surviving corporation:
  (a) The board of directors of the parent shall adopt a plan of
merger that sets forth:
  (A) The names of the parent and subsidiary; and
  (B) The manner and basis of converting the shares of the
subsidiary into shares, obligations or other securities of the
parent or any other corporation or into cash or other property in
whole or part, or of canceling any part of the shares  { - ; - }
 { + . + }
    { - (b) The parent shall mail a copy or summary of the plan
of merger to each shareholder of the subsidiary who does not
waive the mailing requirement in writing; - }
    { - (c) The parent may not deliver the articles of merger to
the office for filing until at least 30 days after the date the
parent mailed a copy of the plan of merger to each shareholder of
the subsidiary who did not waive the mailing requirement; and - }
 
   { +  (b) The parent, not later than 10 days after the
effective date of the merger, shall:
  (A) Notify each shareholder of the subsidiary that the merger
has become effective; and
  (B) Mail a copy or a summary of the plan of merger to each
shareholder of the subsidiary that does not waive this mailing
requirement in writing. + }
    { - (d) - }  { +  (c) + } Articles of merger under this
subsection may not contain amendments to the articles of
incorporation of the parent
  { - corporation - } , except for amendments listed in ORS
60.434.
  (3) If the parent will not be the surviving corporation:
  (a) The board of directors of the parent shall adopt a plan of
merger that sets forth:
  (A) The names of the parent and subsidiary;
  (B) The manner and basis of converting the shares of the parent
into shares of the surviving corporation, which shall ensure that
each shareholder of the parent immediately before the merger
takes effect will immediately thereafter:
  (i) Hold the same percentage of the total of each class of
shares of the surviving corporation owned by former shareholders
of the parent as the shareholder held in each class of shares of
the parent; and
  (ii) Hold shares of the surviving corporation having the same
rights, preferences, privileges and restrictions as the shares of
the parent held by such shareholder immediately before the merger
takes effect;
  (C) Amendments to the articles of incorporation of the
surviving corporation so that the articles are identical to the
articles of incorporation of the parent in effect immediately
before the merger takes effect, except for amendments to the
articles of incorporation of the parent listed in ORS 60.434; and
  (D) Provisions relating to the outstanding shares of the
subsidiary including cancellation of the shares held by the
parent. If under the plan of merger the shareholders of the
subsidiary other than the parent will not be shareholders of the
surviving corporation, the plan shall also set forth the manner
and basis of converting the shares of the subsidiary held by such
shareholders into obligations or other securities of the
surviving corporation or shares, obligations or other securities
of any other corporation or into cash or other property in whole
or in part  { - ; - }  { + . + }
    { - (b) The parent shall mail a copy or summary of the plan
of merger to each shareholder of the subsidiary who does not
waive the mailing requirement in writing; - }
    { - (c) The parent may not deliver the articles of merger to
the office for filing until at least 30 days after the date the
parent mailed a copy or summary of the plan of merger to each
shareholder of the subsidiary who did not waive the mailing
requirement; and - }
   { +  (b) The parent, not later than 10 days after the
effective date of the merger, shall:
  (A) Notify each shareholder of the subsidiary and each
shareholder of the parent that the merger has become effective;
and
  (B) Mail a copy or summary of the plan of merger to each
shareholder of the subsidiary and each shareholder of the parent
that does not waive this mailing requirement in writing. + }
    { - (d) - }  { +  (c) + } The surviving corporation shall be
a domestic corporation.
  SECTION 2. ORS 60.554 is amended to read:
  60.554. (1) Subject to subsection (2) of this section, a
shareholder is entitled to dissent from, and obtain payment of
the fair value of the shareholder's shares in the event of, any
of the following corporate acts:
  (a) Consummation of a plan of merger to which the corporation
is a party if shareholder approval is required for the merger by
ORS 60.487 or the articles of incorporation and the shareholder
is entitled to vote on the merger or if the corporation is a
subsidiary that is merged with its parent under ORS 60.491;
 
 
  (b) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be
acquired, if the shareholder is entitled to vote on the plan;
  (c) Consummation of a sale or exchange of all or substantially
all of the property of the corporation other than in the usual
and regular course of business, if the shareholder is entitled to
vote on the sale or exchange, including a sale in dissolution,
but not including a sale pursuant to court order or a sale for
cash pursuant to a plan by which all or substantially all of the
net proceeds of the sale will be distributed to the shareholders
within one year after the date of sale;
  (d) An amendment of the articles of incorporation that
materially and adversely affects rights in respect of a
dissenter's shares because it:
  (A) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities; or
  (B) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be
acquired for cash under ORS 60.141;
  (e) Any corporate action taken pursuant to a shareholder vote
to the extent the articles of incorporation, bylaws or a
resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment
for their shares; or
  (f) Conversion to a noncorporate business entity pursuant to
ORS 60.472.
  (2) A shareholder entitled to dissent and obtain payment for
the shareholder's shares under ORS 60.551 to 60.594 may not
challenge the corporate action creating the shareholder's
entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.
  (3) Dissenters' rights shall not apply to the holders of shares
of any class or series if the shares of the class or series were
registered on a national securities exchange   { - or quoted on
the National Association of Securities Dealers, Inc. Automated
Quotation System as a National Market System issue - }  on the
record date for the meeting of shareholders at which the
corporate action described in subsection (1) of this section is
to be approved or
  { - on the date a copy or summary of the plan of merger is
mailed to shareholders - }  { +  on the effective date of the
merger + } under ORS 60.491, unless the articles of incorporation
otherwise provide.
  SECTION 3.  { + The amendments to ORS 60.491 and 60.554 by
sections 1 and 2 of this 2009 Act apply to mergers consummated
under the provisions of ORS 60.491 on or after the effective date
of this 2009 Act. + }
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