1914 - Adoption of amendments.
§ 1914. Adoption of amendments. (a) General rule.--A vote of the shareholders entitled to vote on a proposed amendment shall be taken at the next annual or special meeting of which notice for that purpose has been duly given. Unless the articles or a specific provision of this subpart requires a greater vote, a proposed amendment of the articles of a business corporation shall be adopted upon receiving the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon 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 such class vote. Any number of amendments may be submitted to the shareholders and voted upon by them at one meeting. Except as provided in section 1912(a)(2) (relating to proposal of amendments), a proposed amendment of the articles 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 amendment to the shareholders for action. (b) Statutory voting rights.--Except as provided in this subpart, the holders of the outstanding shares of a class or series of shares shall be entitled to vote as a class in respect of a proposed amendment regardless of any limitations stated in the articles or bylaws on the voting rights of any class or series if the amendment would: (1) authorize the board of directors to fix and determine the relative rights and preferences, as between series, of any preferred or special class; (2) make any change in the preferences, limitations or special rights (other than preemptive rights or the right to vote cumulatively) of the shares of a class or series adverse to the class or series; (3) authorize a new class or series of shares having a preference as to dividends or assets which is senior to the shares of a class or series; (4) increase the number of authorized shares of any class or series having a preference as to dividends or assets which is senior in any respect to the shares of a class or series; or (5) make the outstanding shares of a class or series redeemable by a method that is not pro rata, by lot or otherwise equitable. (c) Adoption by board of directors.--Unless otherwise restricted in the articles, an amendment of articles shall not require the approval of the shareholders of the corporation if: (1) shares have not been issued; (2) the amendment is restricted to one or more of the following: (i) changing the corporate name; (ii) providing for perpetual existence; (iii) reflecting a reduction in authorized shares effected by operation of section 1552(a) (relating to power of corporation to acquire its own shares) and, if appropriate, deleting all references to a class or series of shares that is no longer outstanding; (iv) adding or deleting a provision authorized by section 1528(f) (relating to uncertificated shares); or (v) adding, changing or eliminating the par value of any class or series of shares if the par value of that class or series does not have any substantive effect under the terms of that or any other class or series of shares; (3) (i) the corporation has only one class or series of voting shares outstanding; (ii) the corporation does not have any class or series of shares outstanding that is: (A) convertible into those voting shares; (B) junior in any way to those voting shares; or (C) entitled to participate on any basis in distributions with those voting shares; and (iii) the amendment is effective solely to accomplish one of the following purposes with respect to those voting shares: (A) in connection with effectuating a stock dividend of voting shares on the voting shares, to increase the number of authorized shares of the voting shares in the same proportion that the voting shares to be distributed in the stock dividend increase the issued voting shares; or (B) to split the voting shares and, if desired, increase the number of authorized shares of the voting shares or change the par value of the voting shares, or both, in proportion thereto; (4) to the extent the amendment has not been approved by the shareholders, it restates without change all of the operative provisions of the articles as theretofore amended or as amended thereby; or (5) the amendment accomplishes any combination of purposes specified in this subsection. Whenever a provision of this subpart authorizes the board of directors to take any action without the approval of the shareholders and provides that a statement, certificate, plan or other document relating to such action shall be filed in the Department of State and shall operate as an amendment of the articles, the board upon taking such action may, in lieu of filing the statement, certificate, plan or other document, amend the articles under this subsection without the approval of the shareholders to reflect the taking of such action. An amendment of articles under this subsection shall be deemed adopted by the corporation when it has been adopted by the board of directors pursuant to section 1912 (relating to proposal of amendments). (d) Termination of proposal.--Prior to the time when an amendment becomes effective, the amendment may be terminated pursuant to provisions therefor, if any, set forth in the resolution or petition. If articles of amendment have been filed in the department prior to the termination, a statement under section 1902 (relating to statement of termination) shall be filed in the department. (e) Amendment of voting provisions.--Unless otherwise provided in the articles, whenever the articles require for the taking of any action by the shareholders or a class of shareholders a specific number or percentage of votes, the provision of the articles setting forth that requirement shall not be amended or repealed by any lesser number or percentage of votes of the shareholders or of the class of shareholders. (f) Definition.--As used in this section, the term "voting shares" has the meaning specified in section 2552 (relating to definitions). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsecs. (b) and (c) and added subsec. (f). 1990 Amendment. Act 198 amended subsecs. (b), (c)(2) and (e). Cross References. Section 1914 is referred to in sections 1552, 1757, 1922, 1924, 1952, 1953 of this title.