1952 - Proposal and adoption of plan of division.
§ 1952. Proposal and adoption of plan of division. (a) Preparation of plan.--A plan of division shall be prepared, setting forth: (1) The terms and conditions of the division, including the manner and basis of: (i) The reclassification of the shares of the surviving corporation, if there be one, and, if any of the shares of the dividing corporation are not to be converted solely into shares or other securities or obligations of one or more of the resulting corporations, the shares or other securities or obligations of any other person, or cash, property or rights that the holders of such shares are to receive in exchange for or upon conversion of such shares, and the surrender of any certificates evidencing them, which securities or obligations, if any, of any other person or cash, property or rights may be in addition to or in lieu of shares or other securities or obligations of one or more of the resulting corporations. (ii) The disposition of the shares and other securities or obligations, if any, of the new corporation or corporations resulting from the division. (2) A statement that the dividing corporation will, or will not, survive the division. (3) Any changes desired to be made in the articles of the surviving corporation, if there be one, including a restatement of the articles. (4) The articles of incorporation required by subsection (b). (5) 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). (6) Such other provisions as are deemed desirable. (b) Articles of new corporations.--There shall be included in or annexed to the plan of division: (1) Articles of incorporation, which shall contain all of the statements required by this subpart to be set forth in restated articles, for each of the new domestic business corporations, if any, resulting from the division. (2) Articles of incorporation, certificates of incorporation or other charter documents for each of the new foreign business corporations, if any, resulting from the division. (c) Proposal and adoption.--Except as otherwise provided in section 1953 (relating to division without shareholder approval), the plan of division shall be proposed and adopted, and may be amended after its adoption and terminated, by a domestic business corporation in the manner provided for the proposal, adoption, amendment and termination of a plan of merger in Subchapter C (relating to merger, consolidation, share exchanges and sale of assets), except section 1924(b) (relating to adoption by board of directors), or, if the dividing corporation is a foreign business corporation, in accordance with the laws of the jurisdiction in which it is incorporated. 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). (d) Dissenters rights in division.-- (1) Except as otherwise provided in paragraph (2), any shareholder of a business corporation that adopts a plan of division 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). (2) Except as otherwise provided pursuant to section 1571(c) (relating to grant of optional dissenters rights), Subchapter D of Chapter 15 shall not apply to any of the shares of a corporation that is a party to a plan of division pursuant to section 1953 (relating to division without shareholder approval). (e) Restrictions on certain distributions.--(Repealed). (f) Action by holders of preferred or special shares.--If the dividing corporation has outstanding any shares of any preferred or special class or series, the holders of the outstanding shares of the class or series shall be entitled to vote as a class on the plan regardless of any limitations stated in the articles or bylaws on the voting rights of the class or series if the plan of division: (1) provides that the dividing corporation will not survive the division; or (2) amends the articles or bylaws of the surviving corporation in a manner that would entitle the holders of such preferred or special shares to a class vote thereon under the articles, bylaws or section 1914(b) (relating to statutory voting rights). (g) Rights of holders of indebtedness.--If any debt securities, notes or similar evidences of indebtedness for money borrowed, whether secured or unsecured, indentures or other contracts were issued, incurred or executed by the dividing corporation before August 21, 2001, and have not been amended subsequent to that date, the liability of the dividing corporation thereunder shall not be affected by the division nor shall the rights of the obligees thereunder be impaired by the division, and each of the resulting corporations may be proceeded against or substituted in place of the dividing corporation as joint and several obligors on such liability, regardless of any provision of the plan of division apportioning the liabilities of the dividing corporation. (h) Special requirements.--If any provision of the articles or bylaws of a dividing 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 division shall not be proposed or adopted by the directors or (if adoption by the shareholders is otherwise required by this subchapter) 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 division 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 the dividing corporation or a representative of the dividing corporation. (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) and (g) and added subsec. (i). 1992 Amendment. Act 169 amended subsec. (c) and repealed subsec. (e). 1990 Amendment. Act 198 amended subsecs. (a)(5) and (h). Cross References. Section 1952 is referred to in sections 1106, 1571, 1953 of this title.