Is shareholder approval required for an acquisition of stock or assets of another company?
Yes. Pursuant to Listing Rule 5635(a), shareholder approval is required if any director, officer or 5% or greater shareholder has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more. In addition, shareholder approval is required for an acquisition of stock or assets of another company if the present or potential issuance of common stock or securities convertible into or exercisable for common stock, other than a public offering for cash, may exceed 20% of the voting power or the total shares outstanding on a pre-transaction basis.
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