2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 19 - Fundamental Changes
1906 - Special treatment of holders of shares of same class or series.

     § 1906.  Special treatment of holders of shares of same class or
                series.
        (a)  General rule.--Except as otherwise restricted in the
     articles, a plan may contain a provision classifying the holders
     of shares of a class or series into one or more separate groups
     by reference to any facts or circumstances that are not
     manifestly unreasonable and providing mandatory treatment for
     shares of the class or series held by particular shareholders or
     groups of shareholders that differs materially from the
     treatment accorded other shareholders or groups of shareholders
     holding shares of the same class or series (including a
     provision modifying or rescinding rights previously created
     under this section) if:
            (1)  (i)  such provision is specifically authorized by a
            majority of the votes cast by all shareholders entitled
            to vote on the plan, as well as by a majority of the
            votes cast by any class or series of shares any of the
            shares of which are so classified into groups, whether or
            not such class or series would otherwise be entitled to
            vote on the plan; and
                (ii)  the provision voted on specifically enumerates
            the type and extent of the special treatment authorized;
            or
            (2)  under all the facts and circumstances, a court of
        competent jurisdiction finds such special treatment is
        undertaken in good faith, after reasonable deliberation and
        is in the best interest of the corporation.
        (b)  Statutory voting rights upon special treatment.--Except
     as provided in subsection (c), if a plan contains a provision
     for special treatment, each group of holders of any outstanding
     shares of a class or series who are to receive the same special
     treatment under the plan shall be entitled to vote as a special
     class in respect to the plan regardless of any limitations
     stated in the articles or bylaws on the voting rights of any
     class or series.
        (c)  Dissenters rights upon special treatment.--If any plan
     contains a provision for special treatment without requiring for
     the adoption of the plan the statutory class vote required by
     subsection (b), the holder of any outstanding shares the
     statutory class voting rights of which are so denied, who
     objects to the plan and complies with Subchapter D of Chapter 15
     (relating to dissenters rights), shall be entitled to the rights
     and remedies of dissenting shareholders provided in that
     subchapter.
        (d)  Exceptions.--This section shall not apply to:
            (1)  The creation or issuance of securities, contracts,
        warrants or other instruments evidencing any shares, option
        rights, securities having conversion or option rights or
        obligations authorized by section 2513 (relating to disparate
        treatment of certain persons).
            (2)  A provision of a plan that offers to all holders of
        shares of a class or series the same option to elect certain
        treatment.
            (3)  A plan that contains an express provision that this
        section shall not apply or that fails to contain an express
        provision that this section shall apply. The shareholders of
        a corporation that proposes a plan to which this section is
        not applicable by reason of this paragraph shall have the
        remedies contemplated by section 1105 (relating to
        restriction on equitable relief).
            (4)  A provision of a plan that treats all of the holders
        of a particular class or series of shares differently from
        the holders of another class or series. A provision of a plan
        that treats the holders of a class or series of shares
        differently from the holders of another class or series of
        shares shall not constitute a violation of section 1521(d)
        (relating to authorized shares).
        (e)  Definition.--As used in this section, the term "plan"
     includes:
            (1)  an amendment of the articles that effects a
        reclassification of shares, whether or not the amendment is
        accompanied by a separate plan of reclassification; and
            (2)  a resolution recommending that the corporation
        dissolve voluntarily adopted under section 1972(a) (relating
        to proposal of voluntary dissolution).
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001,
     P.L.418, No.34, eff. 60 days)

        Cross References.  Section 1906 is referred to in sections
     1103, 1521, 1571, 1911, 1922, 1930, 1931, 1932, 1952, 1962,
     1972, 2537 of this title.