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TITLE 26-INTERNAL REVENUE CODE have substantially the same terms as the se- curities exchanged, then, except as provided in subsection (W, no gain to the shareholder or security holder from the receipt of such stock or such securi- ties or such stock and securities shall be rec- ognized. (3) Pro rats and other requirements (A) In general Paragraphs (1) and (2) of this subsection, or paragraphs (1) and (2) of subsection (b), as the case may be, shall apply to any distri- bution to the shareholders of a qualified bank holding corporation only if each dis- trbution- (M) which is made by such corporation to its shareholders after July 7, 1970, and on or before the date on which the Board makes its final certification under subsec- tion (e), and (it) to which such paragraph (1) or (2) applies (determined without regard to this paragraph), meets the requirements of subparagraph (B), (C), or (D). (B) Pro rata requirements A distribution meets the requirements of this subparagraph if the distribution is pro rata with respect to all shareholders of the distributing qualified bank holding corpora- tion or with respect to all shareholders of common stock of such corporation. (C) Redemptions when uniform offer is made A distribution meets the requirements of this subparagraph if the distribution is in exchange for stock of the distributing quali- fied bank holding corporation and such dis- tribution is pursuant to a good faith offer made on a uniform basis to all shareholders of the distributing qualified bank holding corporation or to all shareholders of common stock of such corporation. 'D) Non-pro rata distributions from certain closely.held corporations A distribution meets the requirements of this subparagraph if such distribution is made by a qualified bank holding corpora- tion which does not have more than 10 shareholders (within the meaning of section 1371(a)(1)) and does not have as a share. holder a person (other than an estate) which is not an individual, and if the Board (after consultation with the Secretary or his dele- gate) certifies that- (i) a distribution which meets the re- quirements of subparagraph (B) or (C) is not appropriate to effectuate section 4 or the policies of the Bank Holding Company Act, and (it) the distribution being made is neces- sary or appropriate to effectuate section 4 of the policies of such Act. (4) Exception This subsection shall not apply to any dis- tribution by a corporation if such corpora- tion, a corporation having control of such corporation, or a subsidiary of such corpora- tion has made any distribution pursuant to subsection (b) or has made an election under section 6158 with respect to bank property (as defined in section 6158(f)(3)). (5) Distributions involving gift or compensation In the case of a distribution to which para- graph (1) or (2) applies but which- (A) results in a gift, see section 2501 and following, or (B) has the effect of the payment of com- pensation, see section 61. (b) Corporation ceasing to be a bank holding com- pany (1) Distributions of property which cause a corpo- ration to be a bank holding company If- (A) a qualified bank holding corporation distributes property (other than stock re- ceived in an exchange to which subsection (c)(3) applies)- (i) to a shareholder (with respect to its stock held by such shareholder), without the surrender by such shareholder of stock in such corporation, or (ii) to a shareholder, in exchange for its preferred stock, or (iii) to a security holder, in exchange for its securities, and (B) the Board has, before the distribution, certified that- (i) such property is all or part of the property by reason of which such corpora- tion controls (within the meaning of sec- tion 2(a) of the Bank Holding Company Act) a bank or bank holding company, or such property is part of the property by reason of which such corporation did con- trol a bank or a bank holding company before any property of the same kind was distributed under this subsection or ex- changed under subsection (c)(3), and (it) the distribution is necessary or ap- propriate to effectuate the policies of such Ac then no gain to the shareholder or security holder from the receipt of such property shall be recognized. (2) Distributions of stock and securities received in an exchange to which subsection (c)(3) applies if- (A) a qualified bank holding corporation distributes- (i) common stock received in an ex- change to which subsection (c)(3) applies to a shareholder (with respect to its stock held by such shareholder), without the sur- render by such shareholder of stock in such corporation, or (ii) common stock received in an ex- change to which subsection (c)(3) applies to a shareholder in exchange for its common stock, or (Mi) preferred stock or common stock re- ceived in an exchange to which subsection (c)(3) applies to a shareholder, in, ex- change for its preferred stock, or (iv) securities or preferred or common stock received in an exchange to which subsection (c)(3) applies to a security holder, in exchange for its securities, and (B) any preferred stock received has sub- stantially the same terms as the preferred Page 667 §ll10