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BILL NUMBER:S447

TITLE OF BILL: An act to amend the business corporation law, in relation to attendance of a meeting of shareholders by remote communication

PURPOSE OR GENERAL IDEA OF BILL: Allows shareholders to vote remotely.

SUMMARY OF SPECIFIC PROVISIONS: Amends º 602 and 605 of the business corporation law.

JUSTIFICATION: Currently, many shareholders are precluded from participating in the meetings and decision-making process because they are not at the meeting in person. This bill would provide additional access to shareholders by allowing shareholders to remotely participate.

PRIOR LEGISLATIVE HISTORY: 2006:       S.8377/A.2135-A 2007-2008:  S.2152-B/A.1350-B 2009-2010:  S.5793/A.1567

FISCAL IMPACTS: Not known.

EFFECTIVE DATE: This act shall take effect immediately.

Text

STATE OF NEW YORK
________________________________________________________________________

447

2011-2012 Regular Sessions

IN SENATE

(PREFILED)

January 5, 2011
___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN  ACT to amend the business corporation law, in relation to attendance
  of a meeting of shareholders by remote communication

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Paragraphs (b), (c) and (d) of section 602 of the business
corporation law are relettered paragraphs (c), (d) and  (e)  and  a  new
paragraph (b) is added to read as follows:
  (B)(I)  EVERY  CORPORATION WHOSE SHARES ARE TRADED ON A STOCK EXCHANGE
OR IN THE OVER-THE-COUNTER MARKET SHALL: (1) IMPLEMENT REASONABLE  MEAS-
URES  TO  PROVIDE SHAREHOLDERS NOT PHYSICALLY PRESENT AT A SHAREHOLDERS'
MEETING A REASONABLE OPPORTUNITY TO WITNESS THE PROCEEDINGS OF THE MEET-
ING SUBSTANTIALLY CONCURRENTLY WITH SUCH PROCEEDINGS;  AND  (2)  PROVIDE
REASONABLE  MEANS  TO  ENABLE  SHAREHOLDERS TO VOTE OR CAST PROXIES WITH
RESPECT TO MATTERS SUBMITTED TO  THE  SHAREHOLDERS  AT  A  SHAREHOLDERS'
MEETING BY MEANS OF ELECTRONIC COMMUNICATION.
  (II)  THIS PARAGRAPH MAY ALSO APPLY TO OTHER CORPORATIONS IF THE BOARD
OF DIRECTORS HAS ELECTED TO BE SUBJECT TO THIS PARAGRAPH.
  (III) NOTHING REQUIRED IN SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH
SHALL LIMIT, RESTRICT OR SUPERSEDE OTHER FORMS  OF  VOTING  AND  PARTIC-
IPATION.
  (IV)  FOR  PURPOSES  OF  THIS  PARAGRAPH,  "REASONABLE  MEASURES" WITH
RESPECT TO WITNESSING PROCEEDINGS SHALL INCLUDE, BUT NOT BE  LIMITED  TO
AUDIO  WEBCAST  OR  OTHER  BROADCAST OF THE MEETING AND FOR VOTING SHALL
INCLUDE BUT NOT BE LIMITED TO TELEPHONIC AND INTERNET VOTING.
  S 2. Section 605 of the business corporation law, as amended by  chap-
ter  746 of the laws of 1963, paragraph (a) as amended by chapter 498 of
the laws of 1998, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00841-02-1
S. 447                              2

S 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,  date  and hour of the meeting, THE MEANS OF
REMOTE COMMUNICATIONS, IF ANY, BY WHICH  SHAREHOLDERS  AND  PROXYHOLDERS
MAY  WITNESS  THE PROCEEDINGS OF THE MEETING AND VOTE OR CAST PROXIES 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 share-
holder'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 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 share-
holder at the shareholder'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  electronically,  such  notice is given when directed to the
shareholder's electronic 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 to which the meeting is
adjourned AND THE MEANS OF  REMOTE  COMMUNICATIONS,  IF  ANY,  BY  WHICH
SHAREHOLDERS AND PROXYHOLDERS MAY WITNESS THE PROCEEDINGS OF THE MEETING
AND  VOTE OR CAST PROXIES AT THE MEETING are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting  any  busi-
ness  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.
  (C) NOTHING REQUIRED IN PARAGRAPHS (A) AND (B) OF THIS  SECTION  SHALL
LIMIT, RESTRICT OR SUPERSEDE OTHER FORMS OF VOTING AND PARTICIPATION.
  S 3. This act shall take effect immediately.