§11363. Assent of holders of securities and certain other instruments
(a)(1) After making the findings required under section 11362(a) of this title, the Commission may approve and authorize the change if it is assented to by the holders of at least 75 percent of the aggregate principal amount or number of outstanding shares of each class of securities affected by the change. The Commission may increase the percentage required for assent under this subsection for a class of shares when an increase is in the public interest and-
(A) 75 percent of the shares in that class are held by less than 25 security holders; or
(B) that class is entitled to vote for the election of directors of the carrier and the Commission determines that the assent of at least 25 percent of the security holders of that class are controlled by the carrier or a person controlling the carrier.
(2) The carrier may withdraw its application after the Commission makes the findings required under section 11362(a) of this title. If the application is not withdrawn, the Commission must require the carrier to submit the proposed change, with conditions imposed by the Commission, to the holders of each class of its securities affected by the change for their assent or rejection.
(b)(1) In determining the percentage of outstanding securities when making a finding under section 11362(a) of this title, a security that secures an evidence of indebtedness of the carrier or of a company controlling or controlled by the carrier is considered to be outstanding unless the Commission determines that the proposed change does not materially affect the interest of the holder of that evidence of indebtedness. When that security is considered to be outstanding, assent to a proposed change may be given, notwithstanding another instrument, only-
(A) if the security is pledged as security under an instrument under which an evidence of indebtedness was issued and is outstanding, by the holder of a majority of the principal amount of the evidence of indebtedness; or
(B) if the security secures an evidence of indebtedness not issued under an instrument under which an evidence of indebtedness was issued, by the holder of the evidence of indebtedness.
(2) In addition to a submission required under subsection (a) of this section, the Commission shall require the carrier to submit a proposed change to a security referred to in this subsection, with requirements imposed by the Commission, to the holder of the evidence of indebtedness referred to in paragraph (1)(A) and (B) of this subsection as appropriate, for assent or rejection. A carrier is not required to submit the change to the trustee of the instrument referred to in that paragraph.
(c) If the Commission determines that the assent of the holder of a security not entitled to vote for the election of directors of the carrier or an evidence of indebtedness is in the control of the carrier or of a person controlling the carrier, that security or evidence of indebtedness is not considered to be outstanding.
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| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 11363(a)(1) | 49:20b(2) (8th sentence). | Feb. 4, 1887, ch. 104, |
| 11363(a)(2) | 49:20b(2) (4th sentence words between 8th comma and period). | |
| 11363(b) | 49:20b(3) (2d and 3d sentences). | |
| 11363(c) | 49:20b(3) (less 1st–3d and last sentences). |
In subsection (a)(1), the words "After making the findings required under section 11362(a) of this title" are added for clarity. The words "the Commission may approve and authorize the change if it is assented to" are substituted for "If the Commission shall find that as a result of such submission the proposed alteration or modification has been assented to . . . the Commission shall enter an order approving and authorizing the proposed alteration or modification upon the terms and conditions and with amendments, if any, so determined to be just and reasonable" for clarity and to eliminate redundancy in view of subsection (b) of the restated section. The words "The Commission may increase the percentage required for assent under this subsection" are substituted for "such larger percentage, if any as the Commission may determine" for clarity. The words "just and reasonable" are omitted in view of the criteria for an increase under the revised section and in view of section 706 of title 5. The words "at least 25" are substituted for "25 . . . or more" for consistency.
In subsection (a)(2), the words "The carrier may withdraw its application" are substituted for "(unless the applicant, carrier shall withdraw its application)" for clarity. The words "must require the carrier to submit" are substituted for "shall cause the carrier to submit" for clarity. The words "in such manner as it shall direct" are omitted as unnecessary in view of the restatement in section 11364(a) of the revised title.
In subsection (b)(1), the words "In determining . . . when making a finding under section 11362(a) of this title" are substituted for "For the purpose of the finding of the Commission referred to in paragraph (2) of this section" for clarity. The words "the percentage of outstanding securities" are substituted for "as to whether the required percentage of the aggregate principal amount of number of shares outstanding of each class of securities affected by any proposed alteration or modification has assented to the making of such alteration or modification" for clarity and to eliminate redundancy in view of the restatement. The words "is considered" are substituted for "shall be deemed" for clarity. The words "in its discretion" are omitted as surplus. The words "that evidence of indebtedness" are substituted for "the evidence or evidences of indebtedness secured by such security" for clarity. The words "When that security is considered to be outstanding" are substituted for "Whenever any such pledged security is, for said purposes, to be deemed outstanding" for consistency. The words "in respect of such security" are omitted as unnecessary in view of the restatement. The words "notwithstanding another instrument" are substituted for "any express or implied provision in any mortgage, indenture, deed of trust, note or other instrument to the contrary notwithstanding" as being more inclusive. The words "as follows" are omitted as surplus. The word "instrument" is substituted for "mortgage, indenture, deed of trust, or other instrument" for consistency. The words "and in any such case" are omitted as surplus.
In subsection (b)(2), the words "shall require" are substituted for "shall cause" for clarity. The words "in such manner as it shall direct" are omitted as unnecessary in view of the restatement. The words "as the Commission shall have determined to be just and reasonable" are omitted as unnecessary in view of the restatement. The words "referred to in paragraph (1)(A) and (B) of this subsection as appropriate" are substituted for "issued and outstanding pursuant to such mortgage, indenture, deed of trust, or other instrument, or . . . not so issued" for clarity and to eliminate redundancy. The words "A carrier is not required to submit" are substituted for "need not be submitted" for clarity. The words "but assent in respect of any such security shall be determined as hereinbefore in this section provided" are omitted as surplus.
In subsection (c), the words "For the purposes of this section" are omitted as unnecessary in view of the restatement. The words "Commission determines" are substituted for "in the determination of the Commission" for clarity. The words "the assent of the holder of a security not entitled to vote for the election of directors of the carrier or an evidence of indebtedness is in the control of the carrier or of a person controlling the carrier" are substituted for "a security (other than a security entitled to vote for the election of directors of the carrier) or an evidence of indebtedness . . . the assent of the holder thereof . . . is within the control of the carrier or of any person or persons controlling the carrier" for clarity.