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.