S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3894
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             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:
 
   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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01254-01-9

 S. 3894                             2
 
 MENT REASONABLE MEASURES TO PROVIDE SUCH SHAREHOLDERS AND PROXYHOLDERS A
 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

 S. 3894                             3
 
 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 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:

 S. 3894                             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.