Bill Text: NY S03894 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to the locations of shareholder meetings and allows for such meetings to occur via remote communication and establishes how such remote communication will be used.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S03894 Detail]
Download: New_York-2019-S03894-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3894 2019-2020 Regular Sessions IN SENATE February 20, 2019 ___________ Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Author- ities and Commissions AN ACT to amend the business corporation law, in relation to shareholder meetings The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 602 of the business corporation law, paragraph (c) 2 as amended by chapter 803 of the laws of 1965 and paragraph (d) as added 3 by chapter 449 of the laws of 1997, is amended to read as follows: 4 § 602. Meetings of shareholders. 5 (a) Meetings of shareholders may be held at such place, within or 6 without this state, as may be fixed by or under the by-laws, or if not 7 so fixed, [at the office of the corporation in this state] as determined 8 by the board of directors. If, pursuant to this paragraph or the by-laws 9 of the corporation, the board of directors is authorized to determine 10 the place of a meeting of shareholders, the board of directors may, in 11 its sole discretion, determine that the meeting shall not be held at any 12 place, but may instead be held solely by means of remote communication 13 as authorized by paragraph (b) of this section. 14 (b) If authorized by the board of directors in its sole discretion, 15 and subject to such guidelines and procedures as the board of directors 16 may adopt, shareholders and proxyholders not physically present at a 17 meeting of shareholders may, by means of remote communication: 18 (i) Participate in a meeting of shareholders; and 19 (ii) Be deemed present in person and vote at a meeting of sharehold- 20 ers, whether such meeting is to be held at a designated place or solely 21 by means of remote communication, provided that: (1) the corporation 22 shall implement reasonable measures to verify that each person deemed 23 present and permitted to vote at the meeting by means of remote communi- 24 cation is a shareholder or proxyholder; (2) the corporation shall imple- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01254-01-9S. 3894 2 1 ment reasonable measures to provide such shareholders and proxyholders a 2 reasonable opportunity to participate in the meeting and to vote on 3 matters submitted to the shareholders, including an opportunity to read 4 or hear the proceedings of the meeting substantially concurrently with 5 such proceedings; and (3) if any shareholder or proxyholder votes or 6 takes other action at the meeting by means of remote communication, a 7 record of such vote or other action shall be maintained by the corpo- 8 ration. 9 (c) A meeting of shareholders shall be held annually for the election 10 of directors and the transaction of other business on a date fixed by or 11 under the by-laws. A failure to hold the annual meeting on the date so 12 fixed or to elect a sufficient number of directors to conduct the busi- 13 ness of the corporation shall not work a forfeiture or give cause for 14 dissolution of the corporation, except as provided in paragraph (c) of 15 section 1104 (Petition in case of deadlock among directors or sharehold- 16 ers). 17 [(c)] (d) Special meetings of the shareholders may be called by the 18 board and by such person or persons as may be so authorized by the 19 certificate of incorporation or the by-laws. At any such special meeting 20 only such business may be transacted which is related to the purpose or 21 purposes set forth in the notice required by section 605 (Notice of 22 meetings of shareholders). 23 [(d)] (e) Except as otherwise required by this chapter, the by-laws 24 may designate reasonable procedures for the calling and conduct of a 25 meeting of shareholders, including but not limited to specifying: (i) 26 who may call and who may conduct the meeting, (ii) the means by which 27 the order of business to be conducted shall be established, (iii) the 28 procedures and requirements for the nomination of directors, (iv) the 29 procedures with respect to the making of shareholder proposals, and (v) 30 the procedures to be established for the adjournment of any meeting of 31 shareholders. No amendment of the by-laws pertaining to the election of 32 directors or the procedures for the calling and conduct of a meeting of 33 shareholders shall affect the election of directors or the procedures 34 for the calling or conduct in respect of any meeting of shareholders 35 unless adequate notice thereof is given to the shareholders in a manner 36 reasonably calculated to provide shareholders with sufficient time to 37 respond thereto prior to such meeting. 38 § 2. Section 605 of the business corporation law, as amended by chap- 39 ter 746 of the laws of 1963 and paragraph (a) as amended by chapter 498 40 of the laws of 1998, is amended to read as follows: 41 § 605. Notice of meetings of shareholders. 42 (a) Whenever under the provisions of this chapter shareholders are 43 required or permitted to take any action at a meeting, notice shall be 44 given stating the place, if any, date and hour of the meeting, the means 45 of remote communication, if any, by which shareholders and proxyholders 46 may be deemed to be present in person and vote at such meeting and, 47 unless it is the annual meeting, indicating that it is being issued by 48 or at the direction of the person or persons calling the meeting. Notice 49 of a special meeting shall also state the purpose or purposes for which 50 the meeting is called. Notice of any meeting of shareholders may be 51 written or electronic. If, at any meeting, action is proposed to be 52 taken which would, if taken, entitle shareholders fulfilling the 53 requirements of section 623 (Procedure to enforce shareholder's right to 54 receive payment for shares) to receive payment for their shares, the 55 notice of such meeting shall include a statement of that purpose and to 56 that effect and shall be accompanied by a copy of section 623 or anS. 3894 3 1 outline of its material terms. Notice of any meeting shall be given not 2 fewer than ten nor more than sixty days before the date of the meeting, 3 provided, however, that such notice may be given by third class mail not 4 fewer than twenty-four nor more than sixty days before the date of the 5 meeting, to each shareholder entitled to vote at such meeting. If 6 mailed, such notice is given when deposited in the United States mail, 7 with postage thereon prepaid, directed to the shareholder at the share- 8 holder's address as it appears on the record of shareholders, or, if the 9 shareholder shall have filed with the secretary of the corporation a 10 request that notices to the shareholder be mailed to some other address, 11 then directed to him at such other address. If transmitted electron- 12 ically, such notice is given when directed to the shareholder's elec- 13 tronic mail address as supplied by the shareholder to the secretary of 14 the corporation or as otherwise directed pursuant to the shareholder's 15 authorization or instructions. An affidavit of the secretary or other 16 person giving the notice or of a transfer agent of the corporation that 17 the notice required by this section has been given shall, in the absence 18 of fraud, be prima facie evidence of the facts therein stated. 19 (b) When a meeting is adjourned to another time or place, it shall not 20 be necessary, unless the by-laws require otherwise, to give any notice 21 of the adjourned meeting if the time and place, if any, to which the 22 meeting is adjourned and the means of remote communication, if any, by 23 which shareholders and proxyholders may be deemed to be present in 24 person and vote at such adjourned meeting are announced at the meeting 25 at which the adjournment is taken, and at the adjourned meeting any 26 business may be transacted that might have been transacted on the 27 original date of the meeting. However, if after the adjournment the 28 board fixes a new record date for the adjourned meeting, a notice of the 29 adjourned meeting shall be given to each shareholder of record on the 30 new record date entitled to notice under paragraph (a) of this section. 31 § 3. Section 607 of the business corporation law, as amended by chap- 32 ter 746 of the laws of 1963, is amended to read as follows: 33 § 607. List of shareholders at meetings. 34 (a) A list of shareholders as of the record date, certified by the 35 corporate officer responsible for its preparation or by a transfer 36 agent, shall be produced at any meeting of shareholders upon the request 37 thereat or prior thereto of any shareholder. If the meeting is to be 38 held at a place, then a list of shareholders entitled to vote at the 39 meeting shall be produced and kept at the time and place of the meeting 40 during the whole time thereof and may be examined by any shareholder who 41 is present. If the meeting is to be held solely by means of remote 42 communication, then such list shall also be open to the examination of 43 any shareholder during the whole time of the meeting on a reasonably 44 accessible electronic network, and the information required to access 45 such list shall be provided with the notice of the meeting. In the event 46 that the corporation determines to make the list available on an elec- 47 tronic network, the corporation may take reasonable steps to ensure that 48 such information is only available to shareholders of the company. 49 (b) If the right to vote at any meeting is challenged, the inspectors 50 of election, or person presiding thereat, shall require such list of 51 shareholders to be produced as evidence of the right of the persons 52 challenged to vote at such meeting, and all persons who appear from such 53 list to be shareholders entitled to vote thereat may vote at such meet- 54 ing. 55 § 4. Paragraph (b) of section 611 of the business corporation law, as 56 added by chapter 449 of the laws of 1997, is amended to read as follows:S. 3894 4 1 (b) In determining the validity and counting of proxies, ballots and 2 consents, the inspectors shall be limited to an examination of the prox- 3 ies, any envelopes submitted with those proxies and consents, any infor- 4 mation provided in accordance with section 609 (Proxies) or clauses 1 5 and 3 of subparagraph (ii) of paragraph (b) of section 602 (Meetings of 6 shareholders), ballots and the regular books and records of the corpo- 7 ration, except that the inspectors may consider other reliable informa- 8 tion for the limited purpose of reconciling proxies, ballots and 9 consents submitted by or on behalf of banks, brokers, their nominees or 10 similar persons which represent more votes than the holder of a proxy is 11 authorized by the record owner to cast or more votes than the stockhold- 12 er holds of record. If the inspectors consider other reliable informa- 13 tion for the limited purpose permitted herein, the inspectors at the 14 time they make their certification pursuant to paragraph (a) of this 15 section shall specify the precise information considered by them includ- 16 ing the person or persons from whom they obtained the information, when 17 the information was obtained, the means by which the information was 18 obtained and the basis for the inspectors' belief that such information 19 is reliable. 20 § 5. This act shall take effect immediately.
