S T A T E O F N E W Y O R K
________________________________________________________________________
2362
2019-2020 Regular Sessions
I N A S S E M B L Y
January 22, 2019
___________
Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
tee on Corporations, Authorities 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:
Section 1. Section 602 of the business corporation law, paragraph (c)
as amended by chapter 803 of the laws of 1965 and paragraph (d) as added
by chapter 449 of the laws of 1997, is amended to read as follows:
§ 602. Meetings of shareholders.
(a) Meetings of shareholders may be held at such place, within or
without this state, as may be fixed by or under the by-laws, or if not
so fixed, [at the office of the corporation in this state] AS DETERMINED
BY THE BOARD OF DIRECTORS. IF, PURSUANT TO THIS PARAGRAPH OR THE BY-LAWS
OF THE CORPORATION, THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE
THE PLACE OF A MEETING OF SHAREHOLDERS, THE BOARD OF DIRECTORS MAY, IN
ITS SOLE DISCRETION, DETERMINE THAT THE MEETING SHALL NOT BE HELD AT ANY
PLACE, BUT MAY INSTEAD BE HELD SOLELY BY MEANS OF REMOTE COMMUNICATION
AS AUTHORIZED BY PARAGRAPH (B) OF THIS SECTION.
(b) IF AUTHORIZED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION,
AND SUBJECT TO SUCH GUIDELINES AND PROCEDURES AS THE BOARD OF DIRECTORS
MAY ADOPT, SHAREHOLDERS AND PROXYHOLDERS NOT PHYSICALLY PRESENT AT A
MEETING OF SHAREHOLDERS MAY, BY MEANS OF REMOTE COMMUNICATION:
(I) PARTICIPATE IN A MEETING OF SHAREHOLDERS; AND
(II) BE DEEMED PRESENT IN PERSON AND VOTE AT A MEETING OF SHAREHOLD-
ERS, WHETHER SUCH MEETING IS TO BE HELD AT A DESIGNATED PLACE OR SOLELY
BY MEANS OF REMOTE COMMUNICATION, PROVIDED THAT: (1) THE CORPORATION
SHALL IMPLEMENT REASONABLE MEASURES TO VERIFY THAT EACH PERSON DEEMED
PRESENT AND PERMITTED TO VOTE AT THE MEETING BY MEANS OF REMOTE COMMUNI-
CATION IS A SHAREHOLDER OR PROXYHOLDER; (2) THE CORPORATION SHALL IMPLE-
MENT REASONABLE MEASURES TO PROVIDE SUCH SHAREHOLDERS AND PROXYHOLDERS A
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01254-01-9
A. 2362 2
REASONABLE OPPORTUNITY TO PARTICIPATE IN THE MEETING AND TO VOTE ON
MATTERS SUBMITTED TO THE SHAREHOLDERS, INCLUDING AN OPPORTUNITY TO READ
OR HEAR THE PROCEEDINGS OF THE MEETING SUBSTANTIALLY CONCURRENTLY WITH
SUCH PROCEEDINGS; AND (3) IF ANY SHAREHOLDER OR PROXYHOLDER VOTES OR
TAKES OTHER ACTION AT THE MEETING BY MEANS OF REMOTE COMMUNICATION, A
RECORD OF SUCH VOTE OR OTHER ACTION SHALL BE MAINTAINED BY THE CORPO-
RATION.
(C) A meeting of shareholders shall be held annually for the election
of directors and the transaction of other business on a date fixed by or
under the by-laws. A failure to hold the annual meeting on the date so
fixed or to elect a sufficient number of directors to conduct the busi-
ness of the corporation shall not work a forfeiture or give cause for
dissolution of the corporation, except as provided in paragraph (c) of
section 1104 (Petition in case of deadlock among directors or sharehold-
ers).
[(c)] (D) Special meetings of the shareholders may be called by the
board and by such person or persons as may be so authorized by the
certificate of incorporation or the by-laws. At any such special meeting
only such business may be transacted which is related to the purpose or
purposes set forth in the notice required by section 605 (Notice of
meetings of shareholders).
[(d)] (E) Except as otherwise required by this chapter, the by-laws
may designate reasonable procedures for the calling and conduct of a
meeting of shareholders, including but not limited to specifying: (i)
who may call and who may conduct the meeting, (ii) the means by which
the order of business to be conducted shall be established, (iii) the
procedures and requirements for the nomination of directors, (iv) the
procedures with respect to the making of shareholder proposals, and (v)
the procedures to be established for the adjournment of any meeting of
shareholders. No amendment of the by-laws pertaining to the election of
directors or the procedures for the calling and conduct of a meeting of
shareholders shall affect the election of directors or the procedures
for the calling or conduct in respect of any meeting of shareholders
unless adequate notice thereof is given to the shareholders in a manner
reasonably calculated to provide shareholders with sufficient time to
respond thereto prior to such meeting.
§ 2. Section 605 of the business corporation law, as amended by chap-
ter 746 of the laws of 1963 and paragraph (a) as amended by chapter 498
of the laws of 1998, is amended to read as follows:
§ 605. Notice of meetings of shareholders.
(a) Whenever under the provisions of this chapter shareholders are
required or permitted to take any action at a meeting, notice shall be
given stating the place, IF ANY, date and hour of the meeting, THE MEANS
OF REMOTE COMMUNICATION, IF ANY, BY WHICH SHAREHOLDERS AND PROXYHOLDERS
MAY BE DEEMED TO BE PRESENT IN PERSON AND VOTE AT SUCH MEETING and,
unless it is the annual meeting, indicating that it is being issued by
or at the direction of the person or persons calling the meeting. Notice
of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice of any meeting of shareholders may be
written or electronic. If, at any meeting, action is proposed to be
taken which would, if taken, entitle shareholders fulfilling the
requirements of section 623 (Procedure to enforce shareholder's right to
receive payment for shares) to receive payment for their shares, the
notice of such meeting shall include a statement of that purpose and to
that effect and shall be accompanied by a copy of section 623 or an
outline of its material terms. Notice of any meeting shall be given not
A. 2362 3
fewer than ten nor more than sixty days before the date of the meeting,
provided, however, that such notice may be given by third class mail not
fewer than twenty-four nor more than sixty days before the date of the
meeting, to each shareholder entitled to vote at such meeting. If
mailed, such notice is given when deposited in the United States mail,
with postage thereon prepaid, directed to the shareholder at the share-
holder's address as it appears on the record of shareholders, or, if the
shareholder shall have filed with the secretary of the corporation a
request that notices to the shareholder be mailed to some other address,
then directed to him at such other address. If transmitted electron-
ically, such notice is given when directed to the shareholder's elec-
tronic mail address as supplied by the shareholder to the secretary of
the corporation or as otherwise directed pursuant to the shareholder's
authorization or instructions. An affidavit of the secretary or other
person giving the notice or of a transfer agent of the corporation that
the notice required by this section has been given shall, in the absence
of fraud, be prima facie evidence of the facts therein stated.
(b) When a meeting is adjourned to another time or place, it shall not
be necessary, unless the by-laws require otherwise, to give any notice
of the adjourned meeting if the time and place, IF ANY, to which the
meeting is adjourned AND THE MEANS OF REMOTE COMMUNICATION, IF ANY, BY
WHICH SHAREHOLDERS AND PROXYHOLDERS MAY BE DEEMED TO BE PRESENT IN
PERSON AND VOTE AT SUCH ADJOURNED MEETING are announced at the meeting
at which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted on the
original date of the meeting. However, if after the adjournment the
board fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder of record on the
new record date entitled to notice under paragraph (a) OF THIS SECTION.
§ 3. Section 607 of the business corporation law, as amended by chap-
ter 746 of the laws of 1963, is amended to read as follows:
§ 607. List of shareholders at meetings.
(A) A list of shareholders as of the record date, certified by the
corporate officer responsible for its preparation or by a transfer
agent, shall be produced at any meeting of shareholders upon the request
thereat or prior thereto of any shareholder. IF THE MEETING IS TO BE
HELD AT A PLACE, THEN A LIST OF SHAREHOLDERS ENTITLED TO VOTE AT THE
MEETING SHALL BE PRODUCED AND KEPT AT THE TIME AND PLACE OF THE MEETING
DURING THE WHOLE TIME THEREOF AND MAY BE EXAMINED BY ANY SHAREHOLDER WHO
IS PRESENT. IF THE MEETING IS TO BE HELD SOLELY BY MEANS OF REMOTE
COMMUNICATION, THEN SUCH LIST SHALL ALSO BE OPEN TO THE EXAMINATION OF
ANY SHAREHOLDER DURING THE WHOLE TIME OF THE MEETING ON A REASONABLY
ACCESSIBLE ELECTRONIC NETWORK, AND THE INFORMATION REQUIRED TO ACCESS
SUCH LIST SHALL BE PROVIDED WITH THE NOTICE OF THE MEETING. IN THE EVENT
THAT THE CORPORATION DETERMINES TO MAKE THE LIST AVAILABLE ON AN ELEC-
TRONIC NETWORK, THE CORPORATION MAY TAKE REASONABLE STEPS TO ENSURE THAT
SUCH INFORMATION IS ONLY AVAILABLE TO SHAREHOLDERS OF THE COMPANY.
(B) If the right to vote at any meeting is challenged, the inspectors
of election, or person presiding thereat, shall require such list of
shareholders to be produced as evidence of the right of the persons
challenged to vote at such meeting, and all persons who appear from such
list to be shareholders entitled to vote thereat may vote at such meet-
ing.
§ 4. Paragraph (b) of section 611 of the business corporation law, as
added by chapter 449 of the laws of 1997, is amended to read as follows:
A. 2362 4
(b) In determining the validity and counting of proxies, ballots and
consents, the inspectors shall be limited to an examination of the prox-
ies, any envelopes submitted with those proxies and consents, any infor-
mation provided in accordance with section 609 (Proxies) OR CLAUSES 1
AND 3 OF SUBPARAGRAPH (II) OF PARAGRAPH (B) OF SECTION 602 (MEETINGS OF
SHAREHOLDERS), ballots and the regular books and records of the corpo-
ration, except that the inspectors may consider other reliable informa-
tion for the limited purpose of reconciling proxies, ballots and
consents submitted by or on behalf of banks, brokers, their nominees or
similar persons which represent more votes than the holder of a proxy is
authorized by the record owner to cast or more votes than the stockhold-
er holds of record. If the inspectors consider other reliable informa-
tion for the limited purpose permitted herein, the inspectors at the
time they make their certification pursuant to paragraph (a) of this
section shall specify the precise information considered by them includ-
ing the person or persons from whom they obtained the information, when
the information was obtained, the means by which the information was
obtained and the basis for the inspectors' belief that such information
is reliable.
§ 5. This act shall take effect immediately.