2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 25 - Registered Corporations
2565 - Procedure for establishing voting rights of control shares.

     § 2565.  Procedure for establishing voting rights of control
                shares.
        (a)  Special meeting.--A special meeting of the shareholders
     of a registered corporation shall be called by the board of
     directors of the corporation for the purpose of considering the
     voting rights to be accorded to the control shares if an
     acquiring person:
            (1)  files an information statement fully conforming to
        section 2566 (relating to information statement of acquiring
        person);
            (2)  makes a request in writing for a special meeting of
        the shareholders at the time of delivery of the information
        statement;
            (3)  makes a control-share acquisition or a bona fide
        written offer to make a control-share acquisition; and
            (4)  gives a written undertaking at the time of delivery
        of the information statement to pay or reimburse the
        corporation for the expenses of a special meeting of the
        shareholders.
     The special meeting requested by the acquiring person shall be
     held on the date set by the board of directors of the
     corporation, but in no event later than 50 days after the
     receipt of the information statement by the corporation, unless
     the corporation and the acquiring person mutually agree to a
     later date. If the acquiring person so requests in writing at
     the time of delivery of the information statement to the
     corporation, the special meeting shall not be held sooner than
     30 days after receipt by the corporation of the complete
     information statement.
        (b)  Special meeting not requested.--If the acquiring person
     complies with subsection (a)(1) and (3), but no request for a
     special meeting is made or no written undertaking to pay or
     reimburse the expenses of the meeting is given, the issue of the
     voting rights to be accorded to control shares shall be
     submitted to the shareholders at the next annual or special
     meeting of the shareholders of which notice had not been given
     prior to the receipt of such information statement, unless the
     matter of the voting rights becomes moot.
        (c)  Notice and record date.--The notice of any annual or
     special meeting at which the issue of the voting rights to be
     accorded the control shares shall be submitted to shareholders
     shall be given at least ten days prior to the date named for the
     meeting and shall be accompanied by:
            (1)  A copy of the information statement of the acquiring
        person.
            (2)  A copy of any amendment of such information
        statement previously delivered to the corporation at least
        seven days prior to the date on which such notice is given.
            (3)  A statement disclosing whether the board of
        directors of the corporation recommends approval of,
        expresses no opinion and remains neutral toward, recommends
        rejection of, or is unable to take a position with respect to
        according voting rights to control shares. In determining the
        position that it shall take with respect to according voting
        rights to control shares, including to express no opinion and
        remain neutral or to be unable to take a position with
        respect to such issue, the board of directors shall
        specifically consider, in addition to any other factors it
        deems appropriate, the effect of according voting rights to
        control shares upon the interests of employees and of
        communities in which offices or other establishments of the
        corporation are located.
            (4)  Any other matter required by this subchapter to be
        incorporated into or to accompany the notice of meeting of
        shareholders or that the corporation elects to include with
        such notice.
     Only shareholders of record on the date determined by the board
     of directors in accordance with the provisions of section 1763
     (relating to determination of shareholders of record) shall be
     entitled to notice of and to vote at the meeting to consider the
     voting rights to be accorded to control shares.
        (d)  Special meeting or submission of issue at annual or
     special meeting not required.--Notwithstanding subsections (a)
     and (b), the corporation is not required to call a special
     meeting of shareholders or otherwise present the issue of the
     voting rights to be accorded to the control shares at any annual
     or special meeting of shareholders unless:
            (1)  the acquiring person delivers to the corporation a
        complete information statement pursuant to section 2566; and
            (2)  at the time of delivery of such information
        statement, the acquiring person has:
                (i)  entered into a definitive financing agreement or
            agreements (which shall not include best efforts, highly
            confident or similar undertakings but which may have the
            usual and customary conditions, including conditions
            requiring that the control-share acquisition be
            consummated and that the control shares be accorded
            voting rights) with one or more financial institutions or
            other persons having the necessary financial capacity as
            determined by the board of directors of the corporation
            in good faith to provide for any amounts of financing of
            the control-share acquisition not to be provided by the
            acquiring person; and
                (ii)  delivered a copy of such agreements to the
            corporation.
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.)

        1990 Amendment.  Act 198 renumbered section 2564 to section
     2565 and renumbered former section 2565 to section 2566 and
     amended subsecs. (a)(1) and (d)(1).
        Cross References.  Section 2565 is referred to in sections
     2561, 2562, 2567, 2581 of this title.