FRANKLIN FINANCIAL SERVICES CORPORATION
BYLAWS
Adopted June 8, 1983
Amended May 22, 1986
Amended February 26, 1987
Effective April 28, 1987
Amended July 26, 1990
Amended December 2, 1999
Amended April 23, 2002
Amended December 16, 2004
Amended March 9, 2017
Amended December 20, 2018
TABLE OF CONTENTS
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ARTICLE I - OFFICE.......................................................................................................................1
Section 1.1. Registered Office...............................................................................................................1
Section 1.2. Other Offices...................................................................................................................1
ARTICLE II - SHAREHOLDERS’ MEETINGS.........................................................................................1
Section 2.1. Place of Shareholders’ Meetings.............................................................................................1
Section 2.2. Annual Meeting.................................................................................................................1
Section 2.3. Special Meetings...............................................................................................................1
Section 2.4. Business at Meetings of Shareholders........................................................................................2
Section 2.5. Notices of Shareholders’ Meetings...........................................................................................3
Section 2.6. Quorum of and Action by Shareholders.....................................................................................3
Section 2.7. Voting............................................................................................................................4
Section 2.8. Conduct of Meeting...........................................................................................................4
ARTICLE III - BOARD OF DIRECTORS...............................................................................................5
Section 3.1. Number of Directors...........................................................................................................5
Section 3.2. Qualifying Shares...............................................................................................................5
Section 3.3. Classification of Directors.....................................................................................................5
Section 3.4. Vacancies.......................................................................................................................5
Section 3.5. Nomination of Directors......................................................................................................5
Section 3.6. Place of Meeting...............................................................................................................6
Section 3.7. Regular Meetings...............................................................................................................7
Section 3.8. Special Meetings...............................................................................................................7
Section 3.9. Participation in Meetings by Conference Telephone.......................................................................7
Section 3.10. Notices of Meeting of Board of Directors................................................................................7
Section 3.11. Quorum.........................................................................................................................7
Section 3.12. Informal Action by the Board of Directors...............................................................................7
Section 3.13. Powers..........................................................................................................................8
Section 3.14. Removal of Directors by Shareholders.....................................................................................8
Section 3.15. Compulsory Retirement.....................................................................................................8
Section 3.16. Minutes.........................................................................................................................9
Section 3.17. Personal Liability of Directors..............................................................................................9
ARTICLE IV - COMMITTEES.............................................................................................................9
Section 4.1. Appointment of Committees...................................................................................................9
Section 4.2. Delegation of Board Powers to Committees...............................................................................9
Section 4.3. Accounting Firm.............................................................................................................10
ARTICLE V - OFFICERS.................................................................................................................10
Section 5.1. Election and Office...........................................................................................................10
Section 5.2. Term...........................................................................................................................10
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Section 5.3. Powers and Duties of the President.......................................................................................10
Section 5.4. Powers and Duties of the Secretary.......................................................................................10
Section 5.5. Powers and Duties of the Treasurer or Controller.......................................................................10
Section 5.6. Powers and Duties of the Chairman of the Board of Directors.......................................................11
Section 5.7. Delegation of Office.........................................................................................................11
Section 5.8. Vacancies.....................................................................................................................11
Section 5.9. Chairman of the Board of Directors: Limitation on Consecutive Terms of Office....................................11
ARTICLE VI - SURETY BONDS—INSURANCE...................................................................................11
Section 6.1. Surety Bonds.................................................................................................................11
Section 6.2. Insurance.....................................................................................................................12
ARTICLE VII - CORPORATE SEAL...................................................................................................12
Section 7.1. Corporate Seal...............................................................................................................12
ARTICLE VIII - CONFIDENTIAL INFORMATION...............................................................................12
Section 8.1. Nondisclosure Obligation...................................................................................................12
ARTICLE IX - DIVIDENDS.............................................................................................................12
Section 9.1. Cash Dividends...............................................................................................................12
Section 9.2. Stock Splits and Stock Dividends.........................................................................................12
ARTICLE X - SHARE CERTIFICATES...............................................................................................12
Section 10.1. Share Certificates...........................................................................................................12
Section 10.2. Transfer of Shares.........................................................................................................12
Section 10.3. Determination of Shareholders of Record and Closing Transfer Books...........................................12
Section 10.4. Lost Certificates...........................................................................................................13
Section 10.5. Uncertificated Shares.....................................................................................................13
ARTICLE XI - INDEMNIFICATION.................................................................................................14
Section 11.1. General Rule.................................................................................................................14
Section 11.2. Advance Payment of Expenses...........................................................................................14
Section 11.3. No Duplication of Payments.............................................................................................14
Section 11.4. Insurance.....................................................................................................................14
Section 11.5. Indemnification Agreements...............................................................................................14
Section 11.6. Non-Exclusivity.............................................................................................................15
Section 11.7. Survival of Rights...........................................................................................................15
Section 11.8. Modification or Repeal...................................................................................................15
Section 11.9. Effective Date...............................................................................................................15
ARTICLE XII - AMENDMENT OF THE BYLAWS...............................................................................15
Section 12.1. Amendment.................................................................................................................15
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TABLE OF CONTENTS
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ARTICLE XIII - INTERPRETATION OF BYLAWS...............................................................................15
Section 13.1. Interpretation...............................................................................................................15
ARTICLE XIV - FISCAL YEAR.........................................................................................................15
Section 14.1. Fiscal Year...................................................................................................................15
ARTICLE XV - DISASTER...............................................................................................................16
Section 15.1. General.......................................................................................................................16
Section 15.2. Chief Executive Officer...................................................................................................16
Section 15.3. Board of Directors.........................................................................................................16
Section 15.4. Termination of State of Emergency.....................................................................................16
Section 15.5. Notice to Regulators.......................................................................................................16
ARTICLE XVI - MISCELLANEOUS.................................................................................................16
Section 16.1. 1990 Antitakeover Law...................................................................................................16
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FRANKLIN FINANCIAL SERVICES CORPORATION
BYLAWS
Adopted June 8, 1983
Amended May 22, 1986
Amended February 26, 1987
Effective April 28, 1987
Amended July 26, 1990
Amended December 2, 1999
Amended December 16, 2004
Amended March 9, 2017
Amended December 20, 2018
Section 1.1. Registered Office. The registered office of the Corporation shall be located within the Commonwealth of Pennsylvania, at 20 South Main Street, Chambersburg, Pennsylvania. |
Section 1.2. Other Offices. The Corporation may also have offices at such other places within or without the Commonwealth of Pennsylvania, as the Board of Directors may, from time to time, determine. |
(a) Chairman or President. By the Chairman of the Board or the President of the Corporation; or |
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(b) Board of Directors. By a majority of the Board of Directors; or |
(c) Shareholders. By shareholders entitled to cast at least one‑third of the votes which all shareholders are entitled to cast at the meeting. |
Upon the written request of any person or persons entitled to call a special meeting, which request shall set forth the purpose for which the meeting is desired, it shall be the duty of the Secretary to fix the date of such meeting to be held at such time, not less than ten (10) nor more than sixty (60) days after the receipt of such request, as the Secretary may determine, and to give due notice thereof. If the Secretary shall neglect or refuse to fix the date of such meeting and to give notice thereof within ten (10) days after receipt of such request, the person or persons calling the meeting may do so.
(a) General Rule. Except as otherwise provided by law or in these Bylaws, or except as permitted by the chairman of the meeting in the exercise of such officer’s sole discretion in any specific instance, the business which shall be voted upon or discussed at any annual or special meeting of the shareholders shall be limited to the following: (i) matters specified in the written notice of the meeting (or any supplement thereto) given by the Corporation, (ii) matters brought before the meeting at the direction of the Board of Directors, (iii) matters brought before the meeting by the chairman of the meeting, unless a majority of the directors then in office object to such business being conducted at such meeting, or (iv) in the case of an annual meeting of shareholders, matters specified in a written notice given to the Corporation in accordance with all of the requirements set forth below by or on behalf of a shareholder who was a shareholder of record on the record date for such meeting and who continues to be entitled to vote at such meeting (a “Shareholder Notice”). |
(b) Shareholder Notice. A Shareholder Notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation addressed to the attention of the President: (i) in the case of an annual meeting that is called for a date that is within 30 days before or after the anniversary date of the immediately preceding annual meeting of shareholders, not less than 120 days nor more than 150 days prior to the anniversary date of the proxy statement prepared by the Corporation in connection with the immediately preceding annual meeting of shareholders; provided, however, that a proposal submitted by shareholder for inclusion in the Corporation’s proxy statement for an annual meeting which is appropriate for inclusion therein and otherwise complies with Securities Exchange Act of 1934 Rule 14a-8 (including all requirements as to timeliness), or any successor to such Rule, shall be deemed to have also been submitted timely pursuant to these Bylaws, and (ii) in the case of an annual meeting that is called for a date that is not within 30 days before or after the anniversary date of the immediately preceding annual meeting, not later than the close of business on the fifth day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting date was made. Each such Shareholder Notice must set forth: (A) the name and address of the shareholder who intends to bring the business before the annual meeting (the “Proposing Shareholder”), (B) the name and address of the beneficial owner, if different than the Proposing Shareholder, of any of the shares owned of record by the Proposing Shareholder (the “Beneficial Owner”), (C) the number of shares of each class and series of 2 |
shares of the Corporation which are owned of record and beneficially by the Proposing Shareholder and the number which are owned beneficially by any Beneficial Owner, (D) any interest (other than an interest solely as a shareholder) which the Proposing Shareholder or a Beneficial Owner has in the business being proposed by the Proposing Shareholder, (E) a description of all arrangements and understandings between the Proposing Shareholder and any Beneficial Owner and any other person or persons (naming such person or persons) pursuant to which the proposal in the Shareholder Notice is being made, (F) a description of the business which the Proposing Shareholder seeks to bring before the annual meeting, the reason for doing so and, if a specific action is to be proposed, the text of the resolution or resolutions which the Proposing Shareholder proposes that the Corporation adopt, and (G) a representation that the Proposing Shareholder is at the time of giving the Shareholder Notice, was or will be on the record date for the meeting, and will be on the meeting date, a holder of record of shares of the Corporation entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to bring the business specified in the Shareholder Notice before the meeting. The chairman of the meeting may, in his sole discretion, refuse to acknowledge or entertain any business proposed by a shareholder if he determines that such proposal was not made in compliance with the foregoing procedure. |
of Directors, those shareholders who attend the second of such adjourned meetings, although less than a quorum as fixed in this Section, or in the Articles of Incorporation, shall nevertheless constitute a quorum for the purpose of electing Directors. |
(a) Voting. At least five (5) days before any meeting of shareholders, the officer or agent having charge of the transfer books of the Corporation shall make a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order with the address of and the number of shares held by each, which list shall be kept on file at the registered office of the Corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. |
(b) Proxies. At all shareholders’ meetings, shareholders entitled to vote may attend and vote either in person or by proxy. Every proxy shall be executed or authenticated by the shareholder, or by his duly authorized attorney in fact, and shall be filed with or transmitted to the Secretary of the Corporation or the Corporation’s designated agent. A telegram, telex, cablegram, datagram, e‑mail, Internet communication or other means of electronic transmission from a shareholder or attorney-in-fact, or a photographic, facsimile or similar reproduction of a writing executed by a shareholder or attorney-in-fact: (i) may, at the discretion of the Secretary, be treated as properly executed or authenticated for purposes of this subsection, and (ii) shall be so treated if it sets forth or utilizes a confidential and unique identification number or other mark furnished by the Corporation to the shareholder for the purposes of a particular meeting or transaction. A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until the notice thereof has been given to the Secretary of the Corporation. |
(c) Manner of Voting. All elections of Directors shall be by ballot. All other actions by resolution or motion need not be by ballot except upon demand by a majority of the shareholders entitled to vote in person or by proxy before the voting begins. |
(d) Required Vote. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting unless otherwise provided by law, these Bylaws, or the Articles of Incorporation. |
(e) No Cumulative Voting. Cumulative voting shall not be permitted. Each shareholder shall be entitled to one (1) vote for each share standing in his name and may vote, either in person or by proxy, on all matters and elections, including election of Directors. |
allocated to questions or comments on the affairs of the Corporation after the time prescribed for the commencement thereof. |
(a) General. Notwithstanding the provisions of Section 2.4 of these Bylaws (relating to business at meetings of shareholders), nominations of candidates for election to the Board of Directors may be made by the Board of Directors, by a committee appointed by the Board of Directors with authority to do so, or by any shareholder of record entitled to vote in 5 |
the election of directors who is a shareholder on the record date of the meeting and also on the date of the meeting at which Directors are to be elected; provided, however, that with respect to a nomination made by a shareholder, such shareholder must provide timely written notice to the President of the Corporation (a “Nomination Notice”) in accordance with all of the requirements set forth below. |
(b) Timing of Nomination Notice. To be timely, a Nomination Notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation addressed to the attention of the President: (i) in the case of an annual meeting that is called for a date that is within 30 days before or after the anniversary date of the immediately preceding annual meeting of shareholders, not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting, or (ii) in the case of an annual meeting that is called for a date that is not within 30 days before or after the anniversary date of the immediately preceding annual meeting or in the case of a special meeting of shareholders called for the purpose of electing directors, not later than the close of business on the fifth day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting date was made; and |
(c) Contents of Nomination Notice. A Nomination Notice must set forth: (i) the name and address of the shareholder who intends to make the nomination (the “Nominating Shareholder”), (ii) the name and address of the beneficial owner, if different than the Nominating Shareholder, of any of the shares owned of record by the Nominating Shareholder (the “Beneficial Holder”), (iii) the number of shares of each class and series of shares of the Corporation which are owned of record and beneficially by the Nominating Shareholder and the number which are owned beneficially by any Beneficial Holder, (iv) a description of all arrangements and understandings between the Nominating Shareholder and any Beneficial Holder and any other person or persons (naming such person or persons) pursuant to which the nomination is being made, (v) the name and address of the person or persons to be nominated, (vi) a representation that the Nominating Shareholder is at the time of giving of the Nomination Notice, was or will be on the record date for the meeting, and will be on the meeting date, a holder of record of shares of the Corporation entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the Nomination Notice, (vii) such other information regarding each nominee proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the Board of Directors, and (viii) the written consent of each nominee to serve as a director of the Corporation if elected. The chairman of the meeting shall determine in his sole discretion whether nominations have been made in accordance with the requirements of this Section and, if he determines that a nomination is defective, the nomination and any votes cast for the nominee shall be disregarded. |
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(a) Regular Meetings. No notice shall be required to be given of any regular meeting, unless the same is held at other than the time or place for holding such meetings as fixed in accordance with Section 3.7 of these Bylaws, in which event one (1) day’s notice shall be given of the time and place of such meeting. |
(b) Special Meetings. Written or verbal notice stating the date, place and hour of any special meeting of the Board of Directors shall be given at least one (1) day prior to the date named for the meeting. |
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(a) General Powers. The Board of Directors shall have all the power and authority granted by law to the Board, including all powers necessary or appropriate to the management of the business and affairs of the Corporation. |
(b) Specific Powers. Without limiting the general powers conferred by the last preceding clause and the powers conferred by the Articles and these Bylaws of the Corporation, it is hereby expressly declared that the Board of Directors shall have the following powers: |
(i) To confer upon any officer or officers of the Corporation the power to choose, remove or suspend assistant officers, agents or servants. |
(ii) To appoint any person, firm or corporation to accept and hold in trust for the Corporation any property belonging to the Corporation or in which it is interested, and to authorize any such person, firm or corporation to execute any documents and perform any duties that may be requisite in relation to any such trust. |
(iii) To appoint a person or persons to vote shares of another corporation held and owned by the Corporation. |
(iv) To appoint three (3) judges of election who shall determine the number of shares outstanding, the voting power of each, the shares represented at annual or special meetings, the existence of a quorum, the authenticity, validity and effect of proxies, receive votes or ballots, hear and determine all challenges and questions in any way arising in connection with the right to vote. The judges shall tabulate all votes, determine the result and file a written report at the meeting. The decision of the majority of all judges shall be effective in all respects as to the decisions or certificates of all the judges. |
(v) To fix the place, time and purpose of meetings of shareholders. |
(vi) To fix the compensation of Directors and officers for their services. |
Section 3.15. Compulsory Retirement. Every Director of the Corporation shall automatically retire at the end of the calendar year in which he reaches age 72. |
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Section 3.16. Minutes. The Secretary or Assistant Secretary shall keep complete records of the proceedings of the Board of Directors in a minute book kept for that purpose alone. |
(a) General Rule. A director of the Corporation shall not be personally liable for monetary damages for any action taken or any failure to take any action, except to the extent that exemption from liability for monetary damages is not permitted under the laws of the Commonwealth of Pennsylvania as now or hereafter in effect. The provisions of this Subsection (a) are intended to exempt the directors of the Corporation from liability for monetary damages to the maximum extent permitted under the Pennsylvania Directors’ Liability Act (42 Pa. C.S. § 8361 et seq.) or under any other law now or hereafter in effect. |
(b) Specific Rule Under Directors’ Liability Act. Without limitation of Subsection (a) above, a director of the Corporation shall not be personally liable for monetary damages for any action taken or any failure to take any action, unless: (i) the director has breached or failed to perform the duties of his office under Section 8363 of the Directors’ Liability Act, and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The provisions of the preceding sentence shall not exempt a director from: (i) the responsibility or liability of a director pursuant to any criminal statute; or (ii) the liability of a director for the payment of taxes pursuant to local, state or federal law. |
(c) Modification or Repeal. The provisions of this Section 3.17 may be modified or repealed by the Board of Directors in accordance with the procedures for amending these Bylaws; provided, however, that any such modification or repeal shall not have any effect upon the liability of a director relating to any action, any failure to take any action, or events which occurred prior to the effective date of such modification or repeal. |
(d) Effective Date. The provisions of this Section 3.17 shall become effective immediately following its ratification by the shareholders of the Corporation at a meeting of shareholders duly convened after notice to the shareholders of such purpose. |
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Upon authorization of the Board of Directors, the President shall have full power and authority on behalf of the Corporation to attend and to act and to vote at any meeting of the shareholders of any corporation in which the Corporation may hold stock, and, at any such meeting, shall possess and may exercise any and all the rights and powers incident to the ownership of such stock and which, as the owner thereof, the Corporation might have possessed and exercised.
Section 5.7. Delegation of Office. The Board of Directors may delegate the powers or duties of any officer of the Corporation to any other person from time to time. |
Section 5.8. Vacancies. The Board of Directors shall have the power to fill any vacancies in any office occurring from whatever reason. |
(a) General Rule. Except as otherwise provided in Subsection (b) below, no person shall be elected to the office of Chairman of the Board of Directors (hereinafter “Chairman”) for more than three (3) consecutive whole or partial one year terms. A person who has been elected to the office of Chairman on three (3) consecutive occasions shall not again be eligible to be elected to such office until after the expiration of two (2) years from the date on which such person was last elected to such office. |
(b) Exception. The prohibitions set forth in Subsection (a) above may be waived if, not less than sixty (60) days prior to each election which would otherwise be prohibited by Subsection (a) above, the Board of Directors adopts by the affirmative vote of not less than two‑thirds of the directors then in office a resolution expressly waiving such prohibitions; provided, however, that a director who intends to propose such a waiver shall give written notice of his intention to do so to each other director at least thirty (30) days in advance of the meeting of the Board of Directors at which such waiver shall be proposed and voted upon. |
(c) Amendment. This Section 5.9 may not be amended or repealed and no By-law provision inconsistent therewith may be adopted by the Board of Directors, except by resolution adopted by the affirmative vote of not less than two-thirds of the directors then in office; provided, however, that a director who intends to introduce such a resolution shall give written notice of his intention to do so to each other director at least thirty (30) days in advance of the meeting of the Board of Directors at which such resolution shall be proposed and voted upon; provided, further, that no such resolution shall be effective until the expiration of sixty (60) days from the date of the meeting at which it was adopted. |
duties, furnish bond in such amounts and surety as is approved by the Board of Directors. All premiums for surety bonds shall be paid by the corporation. |
Section 7.1. Corporate Seal. The seal of the Corporation shall contain the words “FRANKLIN FINANCIAL SERVICES CORPORATION – Incorporated - 1983.” |
shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of or to vote at any such meeting, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares or otherwise. In such case, only such shareholders as shall be shareholders of record on the date so fixed shall be entitled to notice of or to vote at such meeting, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any record date fixed as aforesaid. The Board of Directors may close the books of the Corporation against transfer of shares during the whole or any part of such period, and in such case written or printed notice thereof shall be mailed at least ten (10) days before the closing thereof to each shareholder of record at the address appearing on the records of the Corporation or supplied by him to the Corporation for the purpose of notice. While the stock transfer books of the Corporation are closed, no transfer of shares shall be made thereon. Unless a record date is fixed by the Board of Directors for the determination of shareholders entitled to receive notice of, or vote at, a shareholders’ meeting, transferees of shares which are transferred on the books of the Corporation within ten (10) days next preceding the date of such meeting shall not be entitled to notice of or to vote at such meeting. The Corporation may treat the registered owner of each share of stock as the person exclusively entitled to vote, to receive notifications and otherwise to exercise all the rights and powers of the owner thereof. |
Section 10.5. Uncertificated Shares. Notwithstanding anything herein to the contrary, any or all classes and series of shares of the Corporation, or any part thereof, may be uncertificated shares to the extent determined by the Board of Directors from time to time; provided, however, that in no event shall any shares represented by a certificate be deemed uncertificated until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical. Notwithstanding anything herein to the contrary, the provisions of Section 10.2 above shall not apply to uncertificated shares and, in lieu thereof, the Board of Directors shall adopt alternative procedures for registration of transfers. |
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fact that the Corporation has not entered into an Indemnification Agreement with any person shall not in any way limit the indemnification rights of such person under this Article XI or otherwise. |
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(a) Partial Opt Out. The following provisions of the Pennsylvania Antitakeover Law of 1990 shall not be applicable to the Corporation: |
(i) Control Share Acquisition Law. The provisions of Subchapter 25G of the Business Corporation Law of 1988 (15 Pa. C.S.A. §§ 2561 through 2567) relating to control share acquisitions; |
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(ii) Short-Term Profits Disgorgement Law. The provisions of Subchapter 25H of the Business Corporation Law of 1988 (15 Pa. C.S.A. §§2571 through 2575) relating to disgorgement by certain controlling shareholders following attempts to acquire control; |
(iii) Severance Compensation Law. The provisions of Subchapter 25I of the Business Corporation Law of 1988 (15 Pa. C.S.A. §§ 2581 through 2583) relating to severance compensation for employees terminated following certain control-share acquisitions; and |
(iv) Labor Contract Preservation Law. The provisions of Subchapter 25J of the Business Corporation Law of 1988 (15 Pa. C.S.A. §§ 2585 through 2588) relating to business combination transactions - labor contracts. |
(b) Effective Date. This Section 16.1 of Article XVI shall take effect immediately on the date of its adoption, July 26, 1990. |