1. (2) such exchange is subject to approval by the affirmative vote of not less than a majority (unless the requirement is increased by a provision contained in the articles of incorporation, bylaws or applicable state law) of the outstanding securities of the Acquired Entity of the class which are to be exchanged, excluding from such outstanding securities the securities of any person who owns, directly or beneficially, 50 percent or more of such outstanding securities;
2. (b) Any holder of shares of the Acquired Entity dissenting from the exchange is entitled to the fair value of his or her securities; and
3. (c) Less than 25 percent of the outstanding securities of the Acquired Entity of any class to be exchanged are held as of the record date for the exchange by persons who have addresses in this state according to the records of the Acquired Entity; provided that any securities held to the knowledge of the Acquired Entity in the names of broker-dealers or nominees of broker-dealers, and any securities controlled by a person who controls, directly or indirectly, 50 percent or more of the outstanding securities of that class, shall not be considered outstanding for the purposes of this subdivision (c).

There is exempted from the provision of section 25110 of the Code, as not being comprehended within the purposes of the Corporate Securities Law of 1968 and the qualification of which is not necessary or appropriate in the public interest or for the protection of investors, the offer and sale of securities of one entity in exchange for all securities issued by another entity (the “Acquired Entity”), except for directors' qualifying shares, if all of the following requirements are met:

(a)(1) Such exchange is subject to approval after a hearing as to the fairness of its terms and conditions, by public commission, board or other governmental authority of a state expressly authorized by the law of such state to grant such approval, or

Note: Authority cited: Sections 25105 and 25610, Corporations Code. Reference: Sections 25105 and 25110, Corporations Code.

History

1. Amendment filed 1-11-72; effective thirtieth day thereafter (Register 72, No. 3). For prior history see Register 71, No. 52.

2. Amendment filed 1-22-75; effective thirtieth day thereafter (Register 75, No. 4).

3. Editorial correction of Note filed 3-9-83 (Register 83, No. 11).

4. Amendment filed 5-3-90; operative 6-2-90 (Register 90, No. 20).

5. Amendment filed 9-23-2009; operative 10-23-2009 (Register 2009, No. 39).