2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 19 - Fundamental Changes
1931 - Share exchanges.

     § 1931.  Share exchanges.
        (a)  General rule.--All the outstanding shares of one or more
     classes or series of a domestic business corporation, designated
     in this section as the exchanging corporation, may, in the
     manner provided in this section, be acquired by any person,
     designated in this section as the acquiring person, through an
     exchange of all the shares pursuant to a plan of exchange. The
     plan of exchange may also provide for the conversion of any
     other shares of the exchanging corporation into shares, other
     securities or obligations of any person or cash, property or
     rights. The procedure authorized by this section shall not be
     deemed to limit the power of any person to acquire all or part
     of the shares or other securities of any class or series of a
     corporation through a voluntary exchange or otherwise by
     agreement with the holders of the shares or other securities.
        (b)  Plan of exchange.--A plan of exchange shall be prepared,
     setting forth:
            (1)  The terms and conditions of the exchange.
            (2)  The manner and basis of exchanging or converting the
        shares of the exchanging corporation into shares or other
        securities or obligations of the acquiring person, and, if
        any of the shares of the exchanging corporation are not to be
        exchanged or converted solely into shares or other securities
        or obligations of the acquiring person, the shares or other
        securities or obligations of any other person or cash,
        property or rights that the holders of the shares of the
        exchanging corporation are to receive in exchange for, or
        upon conversion of, the shares and the surrender of any
        certificates evidencing them, which securities or
        obligations, if any, of any other person or cash, property
        and rights may be in addition to or in lieu of the shares or
        other securities or obligations of the acquiring person.
            (3)  Any changes desired to be made in the articles of
        the exchanging corporation, which may include a restatement
        of the articles.
            (4)  Any provisions desired providing special treatment
        of shares held by any shareholder or group of shareholders as
        authorized by, and subject to the provisions of, section 1906
        (relating to special treatment of holders of shares of same
        class or series). Notwithstanding subsection (a), a plan that
        provides special treatment may affect less than all of the
        outstanding shares of a class or series.
            (5)  Such other provisions as are deemed desirable.
        (c)  Proposal and adoption.--The plan of exchange shall be
     proposed and adopted and may be amended after its adoption and
     terminated by the exchanging corporation in the manner provided
     by this subchapter for the proposal, adoption, amendment and
     termination of a plan of merger except section 1924(b) (relating
     to adoption by board of directors). There shall be included in,
     or enclosed with, the notice of the meeting of shareholders to
     act on the plan a copy or a summary of the plan and, if
     Subchapter D of Chapter 15 (relating to dissenters rights) is
     applicable, a copy of the subchapter and of subsection (d). The
     holders of any class of shares to be exchanged or converted
     pursuant to the plan of exchange shall be entitled to vote as a
     class on the plan if they would have been entitled to vote on a
     plan of merger that affects the class in substantially the same
     manner as the plan of exchange.
        (d)  Dissenters rights in share exchanges.--Any holder of
     shares that are to be exchanged or converted pursuant to a plan
     of exchange who objects to the plan and complies with the
     provisions of Subchapter D of Chapter 15 shall be entitled to
     the rights and remedies of dissenting shareholders therein
     provided, if any. See section 1906(c) (relating to dissenters
     rights upon special treatment).
        (e)  Articles of exchange.--Upon adoption of a plan of
     exchange, as provided in this section, articles of exchange
     shall be executed by the exchanging corporation and shall set
     forth:
            (1)  The name and, subject to section 109 (relating to
        name of commercial registered office provider in lieu of
        registered address), the location of the registered office,
        including street and number, if any, of the exchanging
        corporation.
            (2)  If the plan is to be effective on a specified date,
        the hour, if any, and the month, day and year of the
        effective date.
            (3)  The manner in which the plan was adopted by the
        exchanging corporation.
            (4)  Except as provided in section 1901 (relating to
        omission of certain provisions from filed plans), the plan of
        exchange.
     The articles of exchange shall be filed in the Department of
     State. See sections 134 (relating to docketing statement) and
     135 (relating to requirements to be met by filed documents).
        (f)  Effective date.--Upon the filing of articles of exchange
     in the department or upon the effective date specified in the
     plan of exchange, whichever is later, the plan shall become
     effective.
        (g)  Effect of plan.--Upon the plan of exchange becoming
     effective, the shares of the exchanging corporation that are,
     under the terms of the plan, to be converted or exchanged shall
     cease to exist or shall be exchanged. The former holders of the
     shares shall thereafter be entitled only to the shares, other
     securities or obligations or cash, property or rights into which
     they have been converted or for which they have been exchanged
     in accordance with the plan, and the acquiring person shall be
     the holder of the shares of the exchanging corporation stated in
     the plan to be acquired by such person. The articles of
     incorporation of the exchanging corporation shall be deemed to
     be amended to the extent, if any, that changes in its articles
     are stated in the plan of exchange.
        (h)  Special requirements.--If any provision of the articles
     or bylaws of an exchanging domestic business corporation adopted
     before October 1, 1989, requires for the proposal or adoption of
     a plan of merger, consolidation or asset transfer a specific
     number or percentage of votes of directors or shareholders or
     other special procedures, the plan of exchange shall not be
     proposed by the directors or adopted by the shareholders without
     that number or percentage of votes or compliance with the other
     special procedures.
        (i)  Reference to outside facts.--Any of the terms of a plan
     of exchange may be made dependent upon facts ascertainable
     outside of the plan if the manner in which the facts will
     operate upon the terms of the plan is set forth in the plan.
     Such facts may include, without limitation, actions or events
     within the control of or determinations made by a party to the
     plan or a representative of a party to the plan.
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992,
     P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34,
     eff. 60 days)

        2001 Amendment.  Act 34 amended subsecs. (a), (b), (c), (d)
     and (e) and added subsec. (i).
        1990 Amendment.  Act 198 amended subsec. (b) and added
     subsec. (h).
        Cross References.  Section 1931 is referred to in sections
     1106, 1571 of this title.