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.