HARRY HUGHES, Governor

2907

Securities Act - Corporate Takeovers

FOR the purpose of clarifying actions taken by brokers which
do not constitute a takeover; altering the number of
stockholders who must be residents of this State for an
action to be considered a takeover; altering the
contacts a corporation must have with this State to be
considered a target company; adding certain time limits
for hearings held by the Securities Commissioner with
respect to takeovers; and generally relating to
corporate takeover offers.

BY repealing and reenacting, with amendments,

Article - Corporations and Associations
Section ll-901(h)(2) and (i), and ll-905(e)
Annotated Code of Maryland
(1975 Volume and 1980 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article - Corporations and Associations

11-901.

(h) (2) "Take-over offer" does not include an offer or
acquisition of any equity security of a target company
pursuant to:

(i) Brokers' transactions effected by or
through a broker-dealer in the ordinary course of its
business IF THE BROKER PERFORMS ONLY THE CUSTOMARY BROKER'S
FUNCTION, AND RECEIVES NO MORE THAN THE CUSTOMARY BROKER'S
COMMISSIONS, AND NEITHER THE PRINCIPAL NOR THE BROKER
SOLICITS OR ARRANGES FOR THE SOLICITATION OF ORDERS TO SELL
SHARES OF THE TARGET COMPANY;

(ii) An exchange offer for securities of
another issuer, if the offer is exempted from registration
or is registered under the provisions of this title or if
the offer is registered under the Securities Act of 1933;

(iii) Any other offer to acquire an equity
security, or the acquisition of the equity security pursuant
to the offer, for the sole account of the offeror, from not
more than 25 persons, in good faith and not for the purpose
of avoiding this subtitle;

(iv) An offer made to stockholders of the
target company, if [the number] LESS THAN 35 of its RECORD
OR BENEFICIAL stockholders ARE RESIDENTS OF THIS "STATE [is
less than 100] at the time of the offer;