1200. A reorganization (Section 181) or a share exchange tender
offer (Section 183.5) shall be approved by the board of:
(a) Each constituent corporation in a merger reorganization;
(b) The acquiring corporation in an exchange reorganization;
(c) The acquiring corporation and the corporation whose property
and assets are acquired in a sale-of-assets reorganization;
(d) The acquiring corporation in a share exchange tender offer
(Section 183.5); and
(e) The corporation in control of any constituent or acquiring
domestic or foreign corporation or other business entity under
subdivision (a), (b) or (c) and whose equity securities are issued,
transferred, or exchanged in the reorganization (a "parent party").
1201. (a) The principal terms of a reorganization shall be approved
by the outstanding shares (Section 152) of each class of each
corporation the approval of whose board is required under Section
1200, except as provided in subdivision (b) and except that (unless
otherwise provided in the articles) no approval of any class of
outstanding preferred shares of the surviving or acquiring
corporation or parent party shall be required if the rights,
preferences, privileges and restrictions granted to or imposed upon
that class of shares remain unchanged (subject to the provisions of
subdivision (c)). For the purpose of this subdivision, two classes of
common shares differing only as to voting rights shall be considered
as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if that
corporation, or its shareholders immediately before the
reorganization, or both, shall own (immediately after the
reorganization) equity securities, other than any warrant or right to
subscribe to or purchase those equity securities, of the surviving
or acquiring corporation or a parent party (subdivision (d) of
Section 1200) possessing more than five-sixths of the voting power of
the surviving or acquiring corporation or parent party. In making
the determination of ownership by the shareholders of a corporation,
immediately after the reorganization, of equity securities pursuant
to the preceding sentence, equity securities which they owned
immediately before the reorganization as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to or purchase those shares.
(c) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of the surviving corporation in a merger reorganization if any
amendment is made to its articles which would otherwise require that
approval.
(d) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of any class of a corporation which is a party to a merger or
sale-of-assets reorganization if holders of shares of that class
receive shares of the surviving or acquiring corporation or parent
party having different rights, preferences, privileges or
restrictions than those surrendered. Shares in a foreign corporation
received in exchange for shares in a domestic corporation have
different rights, preferences, privileges and restrictions within the
meaning of the preceding sentence.
(e) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the affirmative vote of at
least two-thirds of each class of the outstanding shares of any close
corporation if the reorganization would result in their receiving
shares of a corporation which is not a close corporation. However,
the articles may provide for a lesser vote, but not less than a
majority of the outstanding shares of each class.
(f) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the outstanding shares
(Section 152) of any class of a corporation which is a party to a
merger reorganization if holders of shares of that class receive
interests of a surviving other business entity in the merger.
(g) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by all shareholders of any
class or series if, as a result of the reorganization, the holders of
that class or series become personally liable for any obligations of
a party to the reorganization, unless all holders of that class or
series have the dissenters' rights provided in Chapter 13 (commencing
with Section 1300).
(h) Any approval required by this section may be given before or
after the approval by the board. Notwithstanding approval required by
this section, the board may abandon the proposed reorganization
without further action by the shareholders, subject to the
contractual rights, if any, of third parties.
1201.5. (a) The principal terms of a share exchange tender offer
(Section 183. 5) shall be approved by the outstanding shares (Section
152) of each class of the corporation making the tender offer or
whose shares are to be used in the tender offer, except as provided
in subdivision (b) and except that (unless otherwise provided in the
articles) no approval of any class of outstanding preferred shares of
either corporation shall be required, if the rights, preferences,
privileges, and restrictions granted to or imposed upon that class of
shares remain unchanged. For the purpose of this subdivision, two
classes of common shares differing only as to voting rights shall be
considered as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if the
corporation, or its shareholders immediately before the tender offer,
or both, shall own (immediately after the completion of the share
exchange proposed in the tender offer) equity securities, (other than
any warrant or right to subscribe to or purchase the equity
securities), of the corporation making the tender offer or of the
corporation whose shares were used in the tender offer, possessing
more than five-sixths of the voting power of either corporation. In
making the determination of ownership by the shareholders of a
corporation, immediately after the tender offer, of equity securities
pursuant to the preceding sentence, equity securities which they
owned immediately before the tender offer as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to, or purchase, shares.
1202. (a) In addition to the requirements of Section 1201, the
principal terms of a merger reorganization shall be approved by all
the outstanding shares of a corporation if the agreement of merger
provides that all the outstanding shares of that corporation are
canceled without consideration in the merger.
(b) In addition to the requirements of Section 1201, if the terms
of a merger reorganization or sale-of-assets reorganization provide
that a class or series of preferred shares is to have distributed to
it a lesser amount than would be required by applicable article
provisions, the principal terms of the reorganization shall be
approved by the same percentage of outstanding shares of that class
or series which would be required to approve an amendment of the
article provisions to provide for the distribution of that lesser
amount.
(c) If a parent party within the meaning of Section 1200 is a
foreign corporation (other than a foreign corporation to which
subdivision (a) of Section 2115 is applicable), any requirement or
lack of a requirement for approval by the outstanding shares of the
foreign corporation shall be based, not on the application of
Sections 1200 and 1201, but on the application of the laws of the
state or place of incorporation of the foreign corporation.
1203. (a) If a tender offer, including a share exchange tender
offer (Section 183.5), or a written proposal for approval of a
reorganization subject to Section 1200 or for a sale of assets
subject to subdivision (a) of Section 1001 is made to some or all of
a corporation's shareholders by an interested party (herein referred
to as an "Interested Party Proposal"), an affirmative opinion in
writing as to the fairness of the consideration to the shareholders
of that corporation shall be delivered as follows:
(1) If no shareholder approval or acceptance is required for the
consummation of the transaction, the opinion shall be delivered to
the corporation's board of directors not later than the time that
consummation of the transaction is authorized and approved by the
board of directors.
(2) If a tender offer is made to the corporation's shareholders,
the opinion shall be delivered to the shareholders at the time that
the tender offer is first made in writing to the shareholders.
However, if the tender offer is commenced by publication and tender
offer materials are subsequently mailed or otherwise distributed to
the shareholders, the opinion may be omitted in that publication if
the opinion is included in the materials distributed to the
shareholders.
(3) If a shareholders' meeting is to be held to vote on approval
of the transaction, the opinion shall be delivered to the
shareholders with the notice of the meeting (Section 601).
(4) If consents of all shareholders entitled to vote are solicited
in writing (Section 603), the opinion shall be delivered at the same
time as that solicitation.
(5) If the consents of all shareholders are not solicited in
writing, the opinion shall be delivered to each shareholder whose
consent is solicited prior to that shareholder's consent being given,
and to all other shareholders at the time they are given the notice
required by subdivision (b) of Section 603.
For purposes of this section, the term "interested party" means a
person who is a party to the transaction and (A) directly or
indirectly controls the corporation that is the subject of the tender
offer or proposal, (B) is, or is directly or indirectly controlled
by, an officer or director of the subject corporation, or (C) is an
entity in which a material financial interest (subdivision (a) of
Section 310) is held by any director or executive officer of the
subject corporation. For purposes of the preceding sentence, "any
executive officer" means the president, any vice president in charge
of a principal business unit, division, or function such as sales,
administration, research, development, or finance, and any other
officer or other person who performs a policymaking function or has
the same duties as those of a president or vice president. The
opinion required by this subdivision shall be provided by a person
who is not affiliated with the offeror and who, for compensation,
engages in the business of advising others as to the value of
properties, businesses, or securities. The fact that the opining
person previously has provided services to the offeror or a related
entity or is simultaneously engaged in providing advice or assistance
with respect to the proposed transaction in a manner which makes its
compensation contingent on the success of the proposed transaction
shall not, for those reasons, be deemed to affiliate the opining
person with the offeror. Nothing in this subdivision shall limit the
applicability of the standards of review of the transaction in the
event of a challenge thereto under Section 310 or subdivision (c) of
Section 1312.
This subdivision shall not apply to an Interested Party Proposal
if the corporation that is the subject thereof does not have shares
held of record by 100 or more persons (determined as provided in
Section 605), or if the transaction has been qualified under Section
25113 or 25121 and no order under Section 25140 or subdivision (a) of
Section 25143 is in effect with respect to that qualification.
(b) If a tender of shares or a vote or written consent is being
sought pursuant to an Interested Party Proposal and a later tender
offer or written proposal for a reorganization subject to Section
1200 or sale of assets subject to subdivision (a) of Section 1001
that would require a vote or written consent of shareholders is made
to the corporation or its shareholders (herein referred to as a
"Later Proposal") by any other person at least 10 days prior to the
date for acceptance of the tendered shares or the vote or notice of
shareholder approval on the Interested Party Proposal, then each of
the following shall apply:
(1) The shareholders shall be informed of the Later Proposal and
any written material provided for this purpose by the later offeror
shall be forwarded to the shareholders at that offeror's expense.
(2) The shareholders shall be afforded a reasonable opportunity to
withdraw any vote, consent, or proxy previously given before the
vote or written consent on the Interested Party Proposal becomes
effective, or a reasonable time to withdraw any tendered shares
before the purchase of the shares pursuant to the Interested Party
Proposal. For purposes of this subdivision, a delay of 10 days from
the notice or publication of the Later Proposal shall be deemed to
provide a reasonable opportunity or time to effect that withdrawal.
1200. A reorganization (Section 181) or a share exchange tender
offer (Section 183.5) shall be approved by the board of:
(a) Each constituent corporation in a merger reorganization;
(b) The acquiring corporation in an exchange reorganization;
(c) The acquiring corporation and the corporation whose property
and assets are acquired in a sale-of-assets reorganization;
(d) The acquiring corporation in a share exchange tender offer
(Section 183.5); and
(e) The corporation in control of any constituent or acquiring
domestic or foreign corporation or other business entity under
subdivision (a), (b) or (c) and whose equity securities are issued,
transferred, or exchanged in the reorganization (a "parent party").
1201. (a) The principal terms of a reorganization shall be approved
by the outstanding shares (Section 152) of each class of each
corporation the approval of whose board is required under Section
1200, except as provided in subdivision (b) and except that (unless
otherwise provided in the articles) no approval of any class of
outstanding preferred shares of the surviving or acquiring
corporation or parent party shall be required if the rights,
preferences, privileges and restrictions granted to or imposed upon
that class of shares remain unchanged (subject to the provisions of
subdivision (c)). For the purpose of this subdivision, two classes of
common shares differing only as to voting rights shall be considered
as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if that
corporation, or its shareholders immediately before the
reorganization, or both, shall own (immediately after the
reorganization) equity securities, other than any warrant or right to
subscribe to or purchase those equity securities, of the surviving
or acquiring corporation or a parent party (subdivision (d) of
Section 1200) possessing more than five-sixths of the voting power of
the surviving or acquiring corporation or parent party. In making
the determination of ownership by the shareholders of a corporation,
immediately after the reorganization, of equity securities pursuant
to the preceding sentence, equity securities which they owned
immediately before the reorganization as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to or purchase those shares.
(c) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of the surviving corporation in a merger reorganization if any
amendment is made to its articles which would otherwise require that
approval.
(d) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of any class of a corporation which is a party to a merger or
sale-of-assets reorganization if holders of shares of that class
receive shares of the surviving or acquiring corporation or parent
party having different rights, preferences, privileges or
restrictions than those surrendered. Shares in a foreign corporation
received in exchange for shares in a domestic corporation have
different rights, preferences, privileges and restrictions within the
meaning of the preceding sentence.
(e) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the affirmative vote of at
least two-thirds of each class of the outstanding shares of any close
corporation if the reorganization would result in their receiving
shares of a corporation which is not a close corporation. However,
the articles may provide for a lesser vote, but not less than a
majority of the outstanding shares of each class.
(f) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the outstanding shares
(Section 152) of any class of a corporation which is a party to a
merger reorganization if holders of shares of that class receive
interests of a surviving other business entity in the merger.
(g) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by all shareholders of any
class or series if, as a result of the reorganization, the holders of
that class or series become personally liable for any obligations of
a party to the reorganization, unless all holders of that class or
series have the dissenters' rights provided in Chapter 13 (commencing
with Section 1300).
(h) Any approval required by this section may be given before or
after the approval by the board. Notwithstanding approval required by
this section, the board may abandon the proposed reorganization
without further action by the shareholders, subject to the
contractual rights, if any, of third parties.
1201.5. (a) The principal terms of a share exchange tender offer
(Section 183. 5) shall be approved by the outstanding shares (Section
152) of each class of the corporation making the tender offer or
whose shares are to be used in the tender offer, except as provided
in subdivision (b) and except that (unless otherwise provided in the
articles) no approval of any class of outstanding preferred shares of
either corporation shall be required, if the rights, preferences,
privileges, and restrictions granted to or imposed upon that class of
shares remain unchanged. For the purpose of this subdivision, two
classes of common shares differing only as to voting rights shall be
considered as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if the
corporation, or its shareholders immediately before the tender offer,
or both, shall own (immediately after the completion of the share
exchange proposed in the tender offer) equity securities, (other than
any warrant or right to subscribe to or purchase the equity
securities), of the corporation making the tender offer or of the
corporation whose shares were used in the tender offer, possessing
more than five-sixths of the voting power of either corporation. In
making the determination of ownership by the shareholders of a
corporation, immediately after the tender offer, of equity securities
pursuant to the preceding sentence, equity securities which they
owned immediately before the tender offer as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to, or purchase, shares.
1202. (a) In addition to the requirements of Section 1201, the
principal terms of a merger reorganization shall be approved by all
the outstanding shares of a corporation if the agreement of merger
provides that all the outstanding shares of that corporation are
canceled without consideration in the merger.
(b) In addition to the requirements of Section 1201, if the terms
of a merger reorganization or sale-of-assets reorganization provide
that a class or series of preferred shares is to have distributed to
it a lesser amount than would be required by applicable article
provisions, the principal terms of the reorganization shall be
approved by the same percentage of outstanding shares of that class
or series which would be required to approve an amendment of the
article provisions to provide for the distribution of that lesser
amount.
(c) If a parent party within the meaning of Section 1200 is a
foreign corporation (other than a foreign corporation to which
subdivision (a) of Section 2115 is applicable), any requirement or
lack of a requirement for approval by the outstanding shares of the
foreign corporation shall be based, not on the application of
Sections 1200 and 1201, but on the application of the laws of the
state or place of incorporation of the foreign corporation.
1203. (a) If a tender offer, including a share exchange tender
offer (Section 183.5), or a written proposal for approval of a
reorganization subject to Section 1200 or for a sale of assets
subject to subdivision (a) of Section 1001 is made to some or all of
a corporation's shareholders by an interested party (herein referred
to as an "Interested Party Proposal"), an affirmative opinion in
writing as to the fairness of the consideration to the shareholders
of that corporation shall be delivered as follows:
(1) If no shareholder approval or acceptance is required for the
consummation of the transaction, the opinion shall be delivered to
the corporation's board of directors not later than the time that
consummation of the transaction is authorized and approved by the
board of directors.
(2) If a tender offer is made to the corporation's shareholders,
the opinion shall be delivered to the shareholders at the time that
the tender offer is first made in writing to the shareholders.
However, if the tender offer is commenced by publication and tender
offer materials are subsequently mailed or otherwise distributed to
the shareholders, the opinion may be omitted in that publication if
the opinion is included in the materials distributed to the
shareholders.
(3) If a shareholders' meeting is to be held to vote on approval
of the transaction, the opinion shall be delivered to the
shareholders with the notice of the meeting (Section 601).
(4) If consents of all shareholders entitled to vote are solicited
in writing (Section 603), the opinion shall be delivered at the same
time as that solicitation.
(5) If the consents of all shareholders are not solicited in
writing, the opinion shall be delivered to each shareholder whose
consent is solicited prior to that shareholder's consent being given,
and to all other shareholders at the time they are given the notice
required by subdivision (b) of Section 603.
For purposes of this section, the term "interested party" means a
person who is a party to the transaction and (A) directly or
indirectly controls the corporation that is the subject of the tender
offer or proposal, (B) is, or is directly or indirectly controlled
by, an officer or director of the subject corporation, or (C) is an
entity in which a material financial interest (subdivision (a) of
Section 310) is held by any director or executive officer of the
subject corporation. For purposes of the preceding sentence, "any
executive officer" means the president, any vice president in charge
of a principal business unit, division, or function such as sales,
administration, research, development, or finance, and any other
officer or other person who performs a policymaking function or has
the same duties as those of a president or vice president. The
opinion required by this subdivision shall be provided by a person
who is not affiliated with the offeror and who, for compensation,
engages in the business of advising others as to the value of
properties, businesses, or securities. The fact that the opining
person previously has provided services to the offeror or a related
entity or is simultaneously engaged in providing advice or assistance
with respect to the proposed transaction in a manner which makes its
compensation contingent on the success of the proposed transaction
shall not, for those reasons, be deemed to affiliate the opining
person with the offeror. Nothing in this subdivision shall limit the
applicability of the standards of review of the transaction in the
event of a challenge thereto under Section 310 or subdivision (c) of
Section 1312.
This subdivision shall not apply to an Interested Party Proposal
if the corporation that is the subject thereof does not have shares
held of record by 100 or more persons (determined as provided in
Section 605), or if the transaction has been qualified under Section
25113 or 25121 and no order under Section 25140 or subdivision (a) of
Section 25143 is in effect with respect to that qualification.
(b) If a tender of shares or a vote or written consent is being
sought pursuant to an Interested Party Proposal and a later tender
offer or written proposal for a reorganization subject to Section
1200 or sale of assets subject to subdivision (a) of Section 1001
that would require a vote or written consent of shareholders is made
to the corporation or its shareholders (herein referred to as a
"Later Proposal") by any other person at least 10 days prior to the
date for acceptance of the tendered shares or the vote or notice of
shareholder approval on the Interested Party Proposal, then each of
the following shall apply:
(1) The shareholders shall be informed of the Later Proposal and
any written material provided for this purpose by the later offeror
shall be forwarded to the shareholders at that offeror's expense.
(2) The shareholders shall be afforded a reasonable opportunity to
withdraw any vote, consent, or proxy previously given before the
vote or written consent on the Interested Party Proposal becomes
effective, or a reasonable time to withdraw any tendered shares
before the purchase of the shares pursuant to the Interested Party
Proposal. For purposes of this subdivision, a delay of 10 days from
the notice or publication of the Later Proposal shall be deemed to
provide a reasonable opportunity or time to effect that withdrawal.
1200. A reorganization (Section 181) or a share exchange tender
offer (Section 183.5) shall be approved by the board of:
(a) Each constituent corporation in a merger reorganization;
(b) The acquiring corporation in an exchange reorganization;
(c) The acquiring corporation and the corporation whose property
and assets are acquired in a sale-of-assets reorganization;
(d) The acquiring corporation in a share exchange tender offer
(Section 183.5); and
(e) The corporation in control of any constituent or acquiring
domestic or foreign corporation or other business entity under
subdivision (a), (b) or (c) and whose equity securities are issued,
transferred, or exchanged in the reorganization (a "parent party").
1201. (a) The principal terms of a reorganization shall be approved
by the outstanding shares (Section 152) of each class of each
corporation the approval of whose board is required under Section
1200, except as provided in subdivision (b) and except that (unless
otherwise provided in the articles) no approval of any class of
outstanding preferred shares of the surviving or acquiring
corporation or parent party shall be required if the rights,
preferences, privileges and restrictions granted to or imposed upon
that class of shares remain unchanged (subject to the provisions of
subdivision (c)). For the purpose of this subdivision, two classes of
common shares differing only as to voting rights shall be considered
as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if that
corporation, or its shareholders immediately before the
reorganization, or both, shall own (immediately after the
reorganization) equity securities, other than any warrant or right to
subscribe to or purchase those equity securities, of the surviving
or acquiring corporation or a parent party (subdivision (d) of
Section 1200) possessing more than five-sixths of the voting power of
the surviving or acquiring corporation or parent party. In making
the determination of ownership by the shareholders of a corporation,
immediately after the reorganization, of equity securities pursuant
to the preceding sentence, equity securities which they owned
immediately before the reorganization as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to or purchase those shares.
(c) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of the surviving corporation in a merger reorganization if any
amendment is made to its articles which would otherwise require that
approval.
(d) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of any class of a corporation which is a party to a merger or
sale-of-assets reorganization if holders of shares of that class
receive shares of the surviving or acquiring corporation or parent
party having different rights, preferences, privileges or
restrictions than those surrendered. Shares in a foreign corporation
received in exchange for shares in a domestic corporation have
different rights, preferences, privileges and restrictions within the
meaning of the preceding sentence.
(e) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the affirmative vote of at
least two-thirds of each class of the outstanding shares of any close
corporation if the reorganization would result in their receiving
shares of a corporation which is not a close corporation. However,
the articles may provide for a lesser vote, but not less than a
majority of the outstanding shares of each class.
(f) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the outstanding shares
(Section 152) of any class of a corporation which is a party to a
merger reorganization if holders of shares of that class receive
interests of a surviving other business entity in the merger.
(g) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by all shareholders of any
class or series if, as a result of the reorganization, the holders of
that class or series become personally liable for any obligations of
a party to the reorganization, unless all holders of that class or
series have the dissenters' rights provided in Chapter 13 (commencing
with Section 1300).
(h) Any approval required by this section may be given before or
after the approval by the board. Notwithstanding approval required by
this section, the board may abandon the proposed reorganization
without further action by the shareholders, subject to the
contractual rights, if any, of third parties.
1201.5. (a) The principal terms of a share exchange tender offer
(Section 183. 5) shall be approved by the outstanding shares (Section
152) of each class of the corporation making the tender offer or
whose shares are to be used in the tender offer, except as provided
in subdivision (b) and except that (unless otherwise provided in the
articles) no approval of any class of outstanding preferred shares of
either corporation shall be required, if the rights, preferences,
privileges, and restrictions granted to or imposed upon that class of
shares remain unchanged. For the purpose of this subdivision, two
classes of common shares differing only as to voting rights shall be
considered as a single class of shares.
(b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if the
corporation, or its shareholders immediately before the tender offer,
or both, shall own (immediately after the completion of the share
exchange proposed in the tender offer) equity securities, (other than
any warrant or right to subscribe to or purchase the equity
securities), of the corporation making the tender offer or of the
corporation whose shares were used in the tender offer, possessing
more than five-sixths of the voting power of either corporation. In
making the determination of ownership by the shareholders of a
corporation, immediately after the tender offer, of equity securities
pursuant to the preceding sentence, equity securities which they
owned immediately before the tender offer as shareholders of another
party to the transaction shall be disregarded. For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to, or purchase, shares.
1202. (a) In addition to the requirements of Section 1201, the
principal terms of a merger reorganization shall be approved by all
the outstanding shares of a corporation if the agreement of merger
provides that all the outstanding shares of that corporation are
canceled without consideration in the merger.
(b) In addition to the requirements of Section 1201, if the terms
of a merger reorganization or sale-of-assets reorganization provide
that a class or series of preferred shares is to have distributed to
it a lesser amount than would be required by applicable article
provisions, the principal terms of the reorganization shall be
approved by the same percentage of outstanding shares of that class
or series which would be required to approve an amendment of the
article provisions to provide for the distribution of that lesser
amount.
(c) If a parent party within the meaning of Section 1200 is a
foreign corporation (other than a foreign corporation to which
subdivision (a) of Section 2115 is applicable), any requirement or
lack of a requirement for approval by the outstanding shares of the
foreign corporation shall be based, not on the application of
Sections 1200 and 1201, but on the application of the laws of the
state or place of incorporation of the foreign corporation.
1203. (a) If a tender offer, including a share exchange tender
offer (Section 183.5), or a written proposal for approval of a
reorganization subject to Section 1200 or for a sale of assets
subject to subdivision (a) of Section 1001 is made to some or all of
a corporation's shareholders by an interested party (herein referred
to as an "Interested Party Proposal"), an affirmative opinion in
writing as to the fairness of the consideration to the shareholders
of that corporation shall be delivered as follows:
(1) If no shareholder approval or acceptance is required for the
consummation of the transaction, the opinion shall be delivered to
the corporation's board of directors not later than the time that
consummation of the transaction is authorized and approved by the
board of directors.
(2) If a tender offer is made to the corporation's shareholders,
the opinion shall be delivered to the shareholders at the time that
the tender offer is first made in writing to the shareholders.
However, if the tender offer is commenced by publication and tender
offer materials are subsequently mailed or otherwise distributed to
the shareholders, the opinion may be omitted in that publication if
the opinion is included in the materials distributed to the
shareholders.
(3) If a shareholders' meeting is to be held to vote on approval
of the transaction, the opinion shall be delivered to the
shareholders with the notice of the meeting (Section 601).
(4) If consents of all shareholders entitled to vote are solicited
in writing (Section 603), the opinion shall be delivered at the same
time as that solicitation.
(5) If the consents of all shareholders are not solicited in
writing, the opinion shall be delivered to each shareholder whose
consent is solicited prior to that shareholder's consent being given,
and to all other shareholders at the time they are given the notice
required by subdivision (b) of Section 603.
For purposes of this section, the term "interested party" means a
person who is a party to the transaction and (A) directly or
indirectly controls the corporation that is the subject of the tender
offer or proposal, (B) is, or is directly or indirectly controlled
by, an officer or director of the subject corporation, or (C) is an
entity in which a material financial interest (subdivision (a) of
Section 310) is held by any director or executive officer of the
subject corporation. For purposes of the preceding sentence, "any
executive officer" means the president, any vice president in charge
of a principal business unit, division, or function such as sales,
administration, research, development, or finance, and any other
officer or other person who performs a policymaking function or has
the same duties as those of a president or vice president. The
opinion required by this subdivision shall be provided by a person
who is not affiliated with the offeror and who, for compensation,
engages in the business of advising others as to the value of
properties, businesses, or securities. The fact that the opining
person previously has provided services to the offeror or a related
entity or is simultaneously engaged in providing advice or assistance
with respect to the proposed transaction in a manner which makes its
compensation contingent on the success of the proposed transaction
shall not, for those reasons, be deemed to affiliate the opining
person with the offeror. Nothing in this subdivision shall limit the
applicability of the standards of review of the transaction in the
event of a challenge thereto under Section 310 or subdivision (c) of
Section 1312.
This subdivision shall not apply to an Interested Party Proposal
if the corporation that is the subject thereof does not have shares
held of record by 100 or more persons (determined as provided in
Section 605), or if the transaction has been qualified under Section
25113 or 25121 and no order under Section 25140 or subdivision (a) of
Section 25143 is in effect with respect to that qualification.
(b) If a tender of shares or a vote or written consent is being
sought pursuant to an Interested Party Proposal and a later tender
offer or written proposal for a reorganization subject to Section
1200 or sale of assets subject to subdivision (a) of Section 1001
that would require a vote or written consent of shareholders is made
to the corporation or its shareholders (herein referred to as a
"Later Proposal") by any other person at least 10 days prior to the
date for acceptance of the tendered shares or the vote or notice of
shareholder approval on the Interested Party Proposal, then each of
the following shall apply:
(1) The shareholders shall be informed of the Later Proposal and
any written material provided for this purpose by the later offeror
shall be forwarded to the shareholders at that offeror's expense.
(2) The shareholders shall be afforded a reasonable opportunity to
withdraw any vote, consent, or proxy previously given before the
vote or written consent on the Interested Party Proposal becomes
effective, or a reasonable time to withdraw any tendered shares
before the purchase of the shares pursuant to the Interested Party
Proposal. For purposes of this subdivision, a delay of 10 days from
the notice or publication of the Later Proposal shall be deemed to
provide a reasonable opportunity or time to effect that withdrawal.
