§ 2564. Voting rights of shares acquired in a control-share acquisition.

394 words·~2 min read·/pa/title-15/chapter-25/2564

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)General rule.-- Control shares shall not have any voting rights unless a resolution approved by a vote of shareholders of the registered corporation at an annual or special meeting of shareholders pursuant to this subchapter restores to the control shares the same voting rights as other shares of the same class or series with respect to elections of directors and all other matters coming before the shareholders. Any such resolution may be approved only by the affirmative vote of the holders of a majority of the voting power entitled to vote in two separate votes as follows:

(1)all the disinterested shares of the corporation; and

(2)all voting shares of the corporation.

(b)Lapse of voting rights.-- Voting rights accorded by approval of a resolution of shareholders shall lapse and be lost if any proposed control-share acquisition which is the subject of the shareholder approval is not consummated within 90 days after shareholder approval is obtained.

(c)Restoration of voting rights.-- Any control shares that do not have voting rights accorded to them by approval of a resolution of shareholders as provided by subsection

(a)or the voting rights of which lapse pursuant to subsection

(b)shall regain such voting rights on transfer to a person other than the acquiring person or any affiliate or associate of the acquiring person (or direct or indirect transferee from the acquiring person or such affiliate or associate solely pursuant to a transfer or series of transfers under section 2561(b)(5)(i) through

(vi)(relating to application and effect of subchapter)) unless such shares shall constitute control shares of the other person, in which case the voting rights of those shares shall again be subject to this subchapter.

(d)Exemption.-- The acquisition of voting shares by a person or group in a transaction that complies with section 321(f) (relating to approval by business corporation) shall be disregarded for purposes of determining if the transaction constitutes a control-share acquisition.

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(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

2022 Amendment. Act 122 added subsec. (d).

1990 Amendment. Act 198 renumbered section 2563 to section 2564 and renumbered former section 2564 to section 2565.

Cross References. Section 2564 is referred to in sections 2543, 2563, 2566, 2567, 2581 of this title.

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