Merger refers to the situation where one of the constituent corporations remains in being and absorbs into itself the other constituent corporation. It refers to the case where no new corporation is created, but where one of the constituent corporations ceases to exist, being absorbed by the remaining corporation.
Generally, statutes authorizing the combination of corporations prescribe the steps by which consolidation or merger may be effected. The general procedure is that the constituent corporations make a contract setting forth the terms of the merger or consolidation, which is subsequently ratified by the requisite number of stockholders of each corporation.
Title: Texas Checklist of Matters That Should Be Considered in Drafting a Merger Agreement: A Comprehensive Guide Introduction: In the state of Texas, drafting a merger agreement requires careful consideration of various legal and business aspects to ensure a smooth merger process. This article presents a detailed checklist of crucial matters specific to Texas that must be addressed in the merger agreement. By incorporating these key elements, companies can protect their interests and mitigate potential risks during the merger process. Keywords: Texas, merger agreement, checklist, matters, drafting, considerations, types of Texas Checklist of Matters That Should Be Considered: 1. Legal Matters: — Compliance with Texas Business Organizations Code: Ensure compliance with the specific provisions of the Texas Business Organizations Code governing mergers. — Governing Law and Venue: Specify Texas as the governing law and select an appropriate venue for dispute resolution. — Minority Rights Protections: Include provisions to protect the rights of minority shareholders during the merger process. 2. Financial Matters: — Shareholder Consideration: Clearly define the form and amount of consideration shareholders will receive in exchange for their shares. — Purchase Price Adjustments: Determine any adjustments required to the purchase price based on financial statements or other agreed-upon metrics. — Allocation of Assets and Liabilities: Allocate assets and liabilities between the merging entities in a fair and equitable manner. 3. Operational Matters: — Transfer of Licenses and Permits: Address the transfer or assignment of licenses, permits, and contracts necessary for the ongoing operations of the merged entity. — Employment and Benefits: Outline the treatment of employees, including their roles, responsibilities, compensation, benefits, and any potential changes. — Intellectual Property Rights: Ensure that all intellectual property rights are adequately protected and transferred as necessary. 4. Reporting and Regulatory Matters: — Required Filings: Identify any required filings with regulatory authorities, such as the Texas Secretary of State or the Securities and Exchange Commission (SEC). — Tax Considerations: Address potential tax implications and obligations resulting from the merger, including any necessary tax filings. — Public Disclosure Obligations: Determine the timing and content of public disclosures required under federal and state securities laws. 5. Post-Merger Matters: — Integration Planning and Implementation: Establish a detailed plan for integrating the merged entities, including operational, financial, and cultural integration. — Termination and Break-Up Provisions: Address the circumstances under which either party may terminate the merger agreement or potential break-up fees. — Survival of Representations and Warranties: Specify the duration and survival of representations, warranties, and indemnification provisions after the merger. Conclusion: Drafting a comprehensive merger agreement in Texas requires addressing various critical matters specific to the state. This checklist covers key legal, financial, operational, reporting, and post-merger considerations. By leveraging this checklist, companies can navigate the complexities of mergers smoothly and protect their interests throughout the process.
