2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 17 - Officers, Directors and Shareholders
1726 - Removal of directors.

     § 1726.  Removal of directors.
        (a)  Removal by the shareholders.--
            (1)  Unless otherwise provided in a bylaw adopted by the
        shareholders, the entire board of directors, or a class of
        the board where the board is classified with respect to the
        power to select directors, or any individual director of a
        business corporation may be removed from office without
        assigning any cause by the vote of shareholders, or of the
        holders of a class or series of shares, entitled to elect
        directors, or the class of directors. In case the board or a
        class of the board or any one or more directors are so
        removed, new directors may be elected at the same meeting.
        Notwithstanding the first sentence of this paragraph, unless
        otherwise provided in the articles by a specific and
        unambiguous statement that directors may be removed from
        office without assigning any cause, the entire board of
        directors, or any class of the board, or any individual
        director of a corporation having a board classified as
        permitted by section 1724(b) (relating to classified board of
        directors), may be removed from office by vote of the
        shareholders entitled to vote thereon only for cause, if such
        classification has been effected in the articles or by a
        bylaw adopted by the shareholders.
            (2)  The repeal of a provision of the articles or bylaws
        prohibiting, or the addition of a provision to the articles
        or bylaws permitting, the removal by the shareholders of the
        board, a class of the board or a director without assigning
        any cause shall not apply to any incumbent director during
        the balance of the term for which he was selected.
            (3)  An individual director shall not be removed (unless
        the entire board or class of the board is removed) from the
        board of a corporation in which shareholders are entitled to
        vote cumulatively for the board or a class of the board if
        sufficient votes are cast against the resolution for his
        removal which, if cumulatively voted at an annual or other
        regular election of directors, would be sufficient to elect
        one or more directors to the board or to the class.
            (4)  The board of directors may be removed at any time
        with or without cause by the unanimous vote or consent of
        shareholders entitled to vote thereon.
            (5)  The articles may not prohibit the removal of
        directors by the shareholders for cause.
        (b)  Removal by the board.--Unless otherwise provided in a
     bylaw adopted by the shareholders, the board of directors may
     declare vacant the office of a director who has been judicially
     declared of unsound mind or who has been convicted of an offense
     punishable by imprisonment for a term of more than one year or
     for any other proper cause which the bylaws may specify or if,
     within 60 days or such other time as the bylaws may specify
     after notice of his selection, he does not accept the office
     either in writing or by attending a meeting of the board of
     directors and fulfill such other requirements of qualification
     as the bylaws may specify.
        (c)  Removal by the court.--Upon application of any
     shareholder or director, the court may remove from office any
     director in case of fraudulent or dishonest acts, or gross abuse
     of authority or discretion with reference to the corporation, or
     for any other proper cause, and may bar from office any director
     so removed for a period prescribed by the court. The corporation
     shall be made a party to the action and as a prerequisite to the
     maintenance of an action under this subsection a shareholder
     shall comply with Subchapter F (relating to derivative actions).
        (d)  Effect of reinstatement.--An act of the board done
     during the period when a director has been suspended or removed
     for cause shall not be impugned or invalidated if the suspension
     or removal is thereafter rescinded by the shareholders or by the
     board or by the final judgment of a court.
        (e)  Cross reference.--See section 1106(b)(4) (relating to
     uniform application of subpart).
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Feb. 10, 2006,
     P.L.21, No.6, eff. imd.)

        2006 Amendment.  Act 6 amended subsec. (a)(1).
        1990 Amendment.  Act 198 amended subsec. (c) and added
     subsecs. (a)(5) and (e).
        Cross References.  Section 1726 is referred to in sections
     1106, 1504 of this title.