September 16, 1981

Re: ______________ — Formation of Bank Holding Company: – Dissenters’ Rights
Dear Mr. ____________:

This is in reply to your letter of August 20, 1981 in which you proposed the deletion of references to dissenters’ rights in the Prospectus of (Proxy Statement of _________). You have concluded Section 1300 of the Corporations Code (the “Code”) cannot confer dissenters’ rights on _________ shareholders because shareholder approval of the reorganization is required solely under Section 1201(d) of the Code.
Section 1201(a) of the Code prescribes the general rule that shareholder approval of a reorganization is required if approval by the Board of Directors is necessitated under Section 1200. Section 1201(b) of the Code eliminates this approval requirement, however, if the shareholders will receive shares of a parent party which will have more than five-sixths of the voting power of the parent. Shareholder approval is not mandated by Section 1201(b) since _________ shareholders will receive shares of _________ possessing all of the voting power of that corporation.
Section 1201(d) of the Code states that a reorganization must be approved by the shareholders, irrespective of Section 1201(b), if they will receive shares of the parent party which have different rights, preferences, privileges, or restrictions than those surrendered. _________ shares differ from _________ shares since _________ shares are assessable while _________ shares are not. (Compare Fin. Code §600.2 with Corp. Code §423). _________ shares may also differ from _________ shares within the context of Section 1201(d) because _________ shares are subject to different dividend restrictions than are _________ shares. (Compare Fin. Code §640 et seq. with Corp. Code §500 et seq.). Consequently, the shareholders of _________ are required to approve the reorganization.
Section 1300(a) of the Code provides for dissenters’ rights only if shareholder approval is required under subdivisions (a) and (b) or subdivision (e) of Section 1201. Since shareholder approval is necessitated solely by Section 1201 (d), dissenters’ right are inapplicable.
The Department therefore concurs with your proposal to delete references to dissenters’ rights in the Prospectus. Should you have any questions, please do not hesitate to contact this office.
Very truly yours,
Superintendent of Banks
cc: Mr. William Holden

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