2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 25 - Registered Corporations › Section 2562 - Definitions

§ 2562. Definitions.
The following words and phrases when used in this subchapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Acquiring person."
A person who makes or proposes to make a control-share acquisition. Two or more persons acting in concert, whether or not pursuant to an express agreement, arrangement, relationship or understanding, including as a partnership, limited partnership, syndicate, or through any means of affiliation whether or not formally organized, for the purpose of acquiring, holding, voting or disposing of shares of a registered corporation, shall also constitute a person for the purposes of this subchapter. A person, together with its affiliates and associates, shall constitute a person for the purposes of this subchapter.
"Affiliate,"
"associate" and "beneficial owner." (Deleted by amendment).
"Affiliate shares."
All voting shares of a corporation beneficially owned by:
(1) an acquiring person;
(2) executive officers or directors who are also officers (including executive officers); or
(3) employee stock plans in which employee participants do not have, under the terms of the plan, the right to direct confidentially the manner in which shares held by the plan for the benefit of the employee will be voted in connection with the consideration of the voting rights to be accorded control shares.
The term does not include existing shares beneficially owned by executive officers or directors who are also officers (including executive officers) if the shares are shares described in paragraph (2) of the definition of "existing shares" that were beneficially owned continuously by the same person or entity described in such paragraph since January 1, 1988, or are shares described in paragraph (3) of that definition that were acquired with respect to such existing shares.
"Beneficial owner."
The term has the meaning specified in section 2552 (relating to definitions). The corporation may adopt reasonable provisions to evidence beneficial ownership, specifically including requirements that holders of voting shares of the corporation provide verified statements evidencing beneficial ownership and attesting to the date of acquisition thereof.
"Control."
The term shall have the meaning specified in section 2573 (relating to definitions).
"Control-share acquisition."
An acquisition, directly or indirectly, by any person of voting power over voting shares of a corporation that, but for this subchapter, would, when added to all voting power of the person over other voting shares of the corporation (exclusive of voting power of the person with respect to existing shares of the corporation), entitle the person to cast or direct the casting of such a percentage of the votes for the first time with respect to any of the following ranges that all shareholders would be entitled to cast in an election of directors of the corporation:
(1) at least 20% but less than 33 1/3%;
(2) at least 33 1/3% but less than 50%; or
(3) 50% or more.
"Control shares."
Those voting shares of a corporation that, upon acquisition of voting power over such shares by an acquiring person, would result in a control-share acquisition. Voting shares beneficially owned by an acquiring person shall also be deemed to be control shares where such beneficial ownership was acquired by the acquiring person:
(1) within 180 days of the day the person makes a control-share acquisition; or
(2) with the intention of making a control-share acquisition.
"Disinterested shares."
All voting shares of a corporation that are not affiliate shares and that were beneficially owned by the same holder (or a direct or indirect transferee from the holder to the extent such shares were acquired by the transferee solely pursuant to a transfer or series of transfers under section 2561(b)(5)(i) through (vi) (relating to application and effect of subchapter)) continuously during the period from:
(1) the last to occur of the following dates:
(i) 12 months preceding the record date described in paragraph (2);
(ii) five business days prior to the date on which there is first publicly disclosed or caused to be disclosed information that there is a person (including the acquiring person) who intends to engage or may seek to engage in a control-share acquisition or that there is a person (including the acquiring person) who has acquired shares as part of, or with the intent of making, a control-share acquisition, as determined by the board of directors of the corporation in good faith considering all the evidence that the board deems to be relevant to such determination, including, without limitation, media reports, share trading volume and changes in share prices; or
(iii) (A) October 17, 1989, in the case of a corporation which was a registered corporation on that date; or
(B) in any other case, the date this subchapter becomes applicable to the corporation; through
(2) the record date established pursuant to section 2565(c) (relating to notice and record date).
"Executive officer."
When used with reference to a corporation, the president, any vice-president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policymaking function or any other person who performs similar policymaking functions. Executive officers of subsidiaries shall be deemed executive officers of the corporation if they perform such policymaking functions for the corporation.
"Existing shares."
(1) Voting shares which have been beneficially owned continuously by the same natural person since January 1, 1988.
(2) Voting shares which are beneficially owned by any natural person or trust, estate, foundation or other similar entity to the extent the voting shares were acquired solely by gift, inheritance, bequest, devise or other testamentary distribution or series of these transactions, directly or indirectly, from a natural person who had beneficially owned the voting shares prior to January 1, 1988.
(3) Voting shares which were acquired pursuant to a stock split, stock dividend, or other similar distribution described in section 2561(c) (relating to application and effect of subchapter) with respect to existing shares that have been beneficially owned continuously since their issuance by the corporation by the natural person or entity that acquired them from the corporation or that were acquired, directly or indirectly, from such natural person or entity, solely pursuant to a transaction or series of transactions described in paragraph (2), and that are held at such time by a natural person or entity described in paragraph (2).
(4) Voting shares which were acquired in a transaction described in section 2561(b)(5).
"Proxy."
Includes any proxy, consent or authorization.
"Proxy solicitation"
or
"solicitation of proxies."
Includes any solicitation of a proxy, including a solicitation of a revocable proxy of the nature and under the circumstances described in section 2563(b)(3) (relating to acquiring person safe harbor).
"Publicly disclosed or caused to be disclosed."
Includes, but is not limited to, any disclosure (whether or not required by law) that becomes public made by a person:
(1) with the intent or expectation that such disclosure become public; or
(2) to another where the disclosing person knows, or reasonably should have known, that the receiving person was not under an obligation to refrain from making such disclosure, directly or indirectly, to the public and such receiving person does make such disclosure, directly or indirectly, to the public.
"Voting shares."
The term shall have the meaning specified in section 2552 (relating to definitions).
(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 amended the def. of "existing shares," added the def. of "beneficial owner" and deleted the def. of "affiliate," "associate" and "beneficial owner."
1990 Amendment.
Act 198 amended par. (2) of the def. of "disinterested shares" and the def. of "proxy solicitation" or "solicitation of proxies" and deleted the def. of "Exchange Act."
Cross References.
Section 2562 is referred to in sections 2543, 2561, 2573, 2581 of this title.