KRS 271B.11-030: Action on plan.

(1) After adopting a plan of merger or share exchange, the board of directors of each

corporation party to the merger, and the board of directors of the corporation whose

shares will be acquired in the share exchange, shall submit the plan of merger

(except as provided in subsection (7) of this section) or share exchange for approval

by its shareholders.

(2) For a plan of merger or share exchange to be approved:

(a) The board of directors shall recommend the plan of merger or share exchange

to the shareholders, unless the board of directors determines that because of

conflict of interest or other special circumstances it should make no

recommendation and communicates the basis for its determination to the

shareholders with the plan; and

(b) The shareholders entitled to vote shall approve the plan.

(3) The board of directors may condition its submission of the proposed merger or

share exchange on any basis.

(4) The corporation shall notify each shareholder, whether or not entitled to vote, of the

proposed sharehol ders' meeting in accordance with KRS 271B.7 -050. The notice

shall also state that the purpose, or one (1) of the purposes, of the meeting is to

consider the plan of merger or share exchange and contain or be accompanied by a

copy or summary of the plan.

(5) Unless this chapter, the articles of incorporation, or the board of directors (acting

pursuant to subsection (3) of this section) require a greater vote or vote by voting

groups, the plan of merger or share exchange to be authorized shall be approved by

each voting group entitled to vote separately on the plan by a majority of all the

votes entitled to be cast on the plan by that voting group.

(6) Separate voting by voting groups shall be required:

(a) On a plan of merger if the plan contains a provision that, if contained in a

proposed amendment to articles of incorporation, would require action by one

(1) or more separate voting groups on the proposed amendment under KRS

271B.10-040; and

(b) On a plan of share exchange by each class or series of shares i ncluded in the

exchange, with each class or series constituting a separate voting group.

(7) Action by the shareholders of the surviving corporation on a plan of merger shall

not be required if:

(a) The articles of incorporation of the surviving corporatio n will not differ

(except for amendments enumerated in KRS 271B.10 -020) from its articles

before the merger;

(b) Each shareholder of the surviving corporation whose shares were outstanding

immediately before the effective date of the merger will hold the same number

of shares, with identical designations, preferences, limitations, and relative

rights, immediately after;

(c) The number of voting shares outstanding immediately after the merger, plus

the number of voting shares issuable as a result of the merg er (either by the

conversion of securities issued pursuant to the merger or the exercise of rights

and warrants issued pursuant to the merger) will not exceed by more than

twenty percent (20%) the total number of voting shares of the surviving

corporation outstanding immediately before the merger; and

(d) The number of participating shares outstanding immediately after the merger,

plus the number of participating shares issuable as a result of the merger

(either by the conversion of securities issued pursuant to the merger or the

exercise of rights and warrants issued pursuant to the merger), will not exceed

by more than twenty percent (20%) the total number of participating shares

outstanding immediately before the merger.

(8) As used in subsection (7) of this section:

(a) "Participating shares" means share s that entitle their holders to participate

without limitation in distributions.

(b) "Voting shares" means shares that entitle their holders to vote unconditionally

in elections of directors.

(9) After a merger or share exchange is authorized, and at any t ime before articles of

merger or share exchange are filed, the planned merger or share exchange may be

abandoned (subject to any contractual rights), without further shareholder action, in

accordance with the procedure set forth in the plan of merger or sh are exchange or,

if none is set forth, in the manner determined by the board of directors.