1924 - Adoption of plan.

     § 1924.  Adoption of plan.        (a)  General rule.--The plan of merger or consolidation shall     be adopted upon receiving the affirmative vote of a majority of     the votes cast by all shareholders entitled to vote thereon of     each of the domestic business corporations that is a party to     the merger or consolidation and, if any class or series of     shares is entitled to vote thereon as a class, the affirmative     vote of a majority of the votes cast in each class vote. The     holders of any class or series of shares of a domestic     corporation that is a party to a merger or consolidation that     effects any change in the articles of the corporation shall be     entitled to vote as a class on the plan if they would have been     entitled to a class vote under the provisions of section 1914     (relating to adoption of amendments) had the change been     accomplished under Subchapter B (relating to amendment of     articles). A proposed plan of merger or consolidation shall not     be deemed to have been adopted by the corporation unless it has     also been approved by the board of directors, regardless of the     fact that the board has directed or suffered the submission of     the plan to the shareholders for action.        (b)  Adoption by board of directors.--            (1)  Unless otherwise required by its bylaws, a plan of        merger or consolidation shall not require the approval of the        shareholders of a constituent domestic business corporation        if:                (i)  whether or not the constituent corporation is            the surviving corporation:                    (A)  the surviving or new corporation is a                domestic business corporation and the articles of the                surviving or new corporation are identical to the                articles of the constituent corporation, except                changes that under section 1914(c) (relating to                adoption by board of directors) may be made without                shareholder action;                    (B)  each share of the constituent corporation                outstanding immediately prior to the effective date                of the merger or consolidation is to continue as or                to be converted into, except as may be otherwise                agreed by the holder thereof, an identical share of                the surviving or new corporation after the effective                date of the merger or consolidation; and                    (C)  the plan provides that the shareholders of                the constituent corporation are to hold in the                aggregate shares of the surviving or new corporation                to be outstanding immediately after the effectiveness                of the plan entitled to cast at least a majority of                the votes entitled to be cast generally for the                election of directors;                (ii)  immediately prior to the adoption of the plan            and at all times thereafter prior to its effective date,            another corporation that is a party to the plan owns            directly or indirectly 80% or more of the outstanding            shares of each class of the constituent corporation; or                (iii)  no shares of the constituent corporation have            been issued prior to the adoption of the plan of merger            or consolidation by the board of directors pursuant to            section 1922 (relating to plan of merger or            consolidation).            (2)  If a merger or consolidation is effected pursuant to        paragraph (1)(i) or (iii), the plan of merger or        consolidation shall be deemed adopted by the constituent        corporation when it has been adopted by the board of        directors pursuant to section 1922.            (3)  If a merger or consolidation of a subsidiary        corporation with a parent corporation is effected pursuant to        paragraph (1)(ii), the plan of merger or consolidation shall        be deemed adopted by the subsidiary corporation when it has        been adopted by the board of the parent corporation and        neither approval of the plan by the board of directors of the        subsidiary corporation nor execution of articles of merger or        consolidation by the subsidiary corporation shall be        necessary.            (4)  (i)  Unless otherwise required by its bylaws, a plan            of merger or consolidation providing for the merger or            consolidation of a domestic business corporation            (referred to in this paragraph as the "constituent            corporation") with or into a single indirect wholly owned            subsidiary (referred to in this paragraph as the            "subsidiary corporation") of the constituent corporation            shall not require the approval of the shareholders of            either the constituent corporation or the subsidiary            corporation if all of the provisions of this paragraph            are satisfied.                (ii)  A merger or consolidation under this paragraph            shall satisfy the following conditions:                    (A)  The constituent corporation and the                subsidiary corporation are the only parties to the                merger or consolidation, other than the resulting                corporation, if any, in a consolidation (the                corporation that survives or results from the merger                or consolidation is referred to in this paragraph as                the "resulting subsidiary").                    (B)  Each share or fraction of a share of the                capital stock of the constituent corporation                outstanding immediately prior to the effective time                of the merger or consolidation is converted in the                merger or consolidation into a share or equal                fraction of a share of capital stock of a holding                company having the same designations, rights, powers                and preferences and the qualifications, limitations                and restrictions as the share of stock of the                constituent corporation being converted in the merger                or consolidation.                    (C)  The holding company and the resulting                subsidiary are each domestic business corporations.                    (D)  Immediately following the effective time of                the merger or consolidation, the articles of                incorporation and bylaws of the holding company are                identical to the articles of incorporation and bylaws                of the constituent corporation immediately before the                effective time of the merger or consolidation except                for changes that could be made without shareholder                approval under section 1914(c) (relating to adoption                by board of directors).                    (E)  Immediately following the effective time of                the merger or consolidation, the resulting subsidiary                is a direct or indirect wholly owned subsidiary of                the holding company.                    (F)  The directors of the constituent corporation                become or remain the directors of the holding company                upon the effective time of the merger or                consolidation.                    (G)  The board of directors of the constituent                corporation has made a good faith determination that                the shareholders of the constituent corporation will                not recognize gain or loss for United States Federal                Income Tax purposes.                (iii)  As used in this paragraph only, the term            "holding company" means a corporation that, from its            incorporation until consummation of the merger or            consolidation governed by this paragraph, was at all            times a direct wholly owned subsidiary of the constituent            corporation and whose capital stock is issued in the            merger or consolidation.                (iv)  If the holding company is a registered            corporation, the shares of the holding company issued in            connection with the merger or consolidation shall be            deemed to have been acquired at the time that the shares            of the constituent corporation converted in the merger or            consolidation were acquired.            (5)  A plan of merger or consolidation adopted by the        board of directors under this subsection without the approval        of the shareholders shall not, by itself, create or impair        any rights or obligations on the part of any person under        section 2538 (relating to approval of transactions with        interested shareholders) or under Subchapters E (relating to        control transactions), F (relating to business combinations),        G (relating to control-share acquisitions), H (relating to        disgorgement by certain controlling shareholders following        attempts to acquire control), I (relating to severance        compensation for employees terminated following certain        control-share acquisitions) and J (relating to business        combination transactions - labor contracts) of Chapter 25,        nor shall it change the standard of care applicable to the        directors under Subchapter B of Chapter 17 (relating to        fiduciary duty).        (c)  Termination of plan.--Prior to the time when a merger or     consolidation becomes effective, the merger or consolidation may     be terminated pursuant to provisions therefor, if any, set forth     in the plan. If articles of merger or consolidation have been     filed in the Department of State prior to the termination, a     statement under section 1902 (relating to statement of     termination) shall be filed in the department.        (d)  Cross reference.--See section 2539 (relating to adoption     of plan of merger by board of directors).     (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 subsec. (b)(1)(ii) and (3)     and added subsec. (b)(4) and (5).        1992 Amendment.  Act 169 amended subsecs. (a) and (b)(1)(ii)     and added subsec. (d).        1990 Amendment.  Act 198 amended subsecs. (a) and (b),     retroactive to October 1, 1989, as to subsec. (b).        Cross References.  Section 1924 is referred to in sections     1926, 1930, 1931, 1932, 1952, 1962, 2538, 2539 of this title.