Bill Text: NC S239 | 2013-2014 | Regular Session | Chaptered
Bill Title: Amend NC Business Corporation Act
Spectrum: Slight Partisan Bill (Republican 4-2)
Status: (Passed) 2013-06-19 - Ch. SL 2013-153 [S239 Detail]
Download: North_Carolina-2013-S239-Chaptered.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
SESSION LAW 2013-153
SENATE BILL 239
AN ACT to make various revisions to the north carolina business corporation act.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 55‑6‑21(a) reads as rewritten:
"(a) The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation. Unless the articles of incorporation or bylaws provide otherwise, the powers granted in this section to the board of directors may be delegated, within limits prescribed by the board of directors, to one or more officers of the corporation who are designated by the board of directors."
SECTION 2. G.S. 55‑6‑24(a) reads as rewritten:
"(a) A corporation may
issue rights, options, or warrants for the purchase of shares of the
corporation. The board of directorsdirectors, or officers of the
corporation who are designated by the board of directors pursuant to G.S. 55‑6‑21(a),
shall determine the terms upon which the rights, options, or warrants are
issued, their form and content, and the consideration for which the shares are
to be issued."
SECTION 3. G.S. 55‑7‑05(a) reads as rewritten:
"(a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than 10 nor more than 60 days before the meeting date. If the board of directors has authorized participation by means of remote communication pursuant to G.S. 55‑7‑09 for any class or series of shareholders, the notice to such class or series of shareholders shall describe the means of remote communication to be used. Unless this Chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting."
SECTION 4. G.S. 55‑7‑08 is repealed.
SECTION 5. Article 7 of Chapter 55 of the General Statutes is amended by adding a new section to read:
"§ 55‑7‑09. Remote participation in meetings.
(a) To the extent authorized by a corporation's board of directors, shareholders of any class or series designated by the board of directors may participate in any meeting of shareholders by means of remote communication. Participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts and shall be in conformity with subsection (b) of this section.
(b) Shareholders participating in a shareholders' meeting by means of remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures to do all of the following:
(1) Verify that each person participating remotely is a shareholder.
(2) Provide each shareholder participating remotely a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate and read or hear the proceedings of the meeting, substantially concurrently with such proceedings."
SECTION 6. G.S. 55‑7‑20(c) reads as rewritten:
"(c) The corporation
shall make the shareholders' list available at the meeting, and any
shareholder, personally or by or with his representative, is entitled to
inspect the list at any time during the meeting or any adjournment. The
corporation is not required to make the list available through electronic or
other means of remote communication to a shareholder or proxy attending the
meeting by remote communication pursuant to G.S. 55‑7‑08.G.S. 55‑7‑09."
SECTION 7. Article 8 of Chapter 55 of the General Statutes is amended by adding a new section to read:
"§ 55‑8‑26. Submission of matters for shareholder vote.
A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter."
SECTION 8. G.S. 55‑10‑03 reads as rewritten:
"§ 55‑10‑03. Amendment by board of directors and shareholders.
(b) Except as provided in G.S. 55‑10‑02,
55‑10‑07, and 55‑14A‑01, after adopting the proposed
amendment the board of directors mustshall submit the amendment
to the shareholders for their approval. The board of directors mustshall
also transmit to the shareholders a recommendation that the shareholders
approve the amendment, unless the board of directors determines that,
because of conflict of interest or other special circumstances, it should not
make such a recommendation, in which event the board of directors must
communicate the basis for that determination to the shareholders with the
amendment.one of the following circumstances exist, in which event the
board of directors shall communicate the basis for not recommending approval of
the amendment to the shareholders at the time it submits the amendment to the
shareholders:
(1) The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the amendment.
(2) G.S. 55‑8‑26 applies.
(e) Unless this Chapter,
the articles of incorporation, a bylaw adopted by the shareholders, or the
board of directors (acting pursuant to subsection (c)) require a greater vote
or a vote by voting groups, the amendment to be adopted must be approved by:by
all of the following:
(1) A majority of the votes
entitled to be cast on the amendment by any voting group with respect to which
the amendment would create appraisal rights; andrights.
(2) The votes required by G.S. 55‑7‑25 and G.S. 55‑7‑26 by every other voting group entitled to vote on the amendment."
SECTION 9. G.S. 55‑11‑03 reads as rewritten:
"§ 55‑11‑03. Action on plan.
(a) After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger, and the board of directors of the corporation whose shares will be acquired in the share exchange, shall submit the plan of merger (except as provided in subsection (g)) or share exchange for approval by its shareholders.
(b) ForThe
following requirements shall be met for a plan of merger or share exchange
to be approved:
(1) The board of directors mustshall
recommend to the shareholders that the plan of merger or share exchange to
the shareholders,be approved, unless the board of directors
determines that because of conflict of interest or other special circumstances
it should make no recommendation, in which event the board of directors must
communicate the basis for its lack of a recommendation to the shareholders with
the plan; andone of the following circumstances exist, in which event
the board of directors shall communicate the basis for not recommending
approval of the plan of merger or share exchange to the shareholders at the
time it submits the plan of merger or share exchange to the shareholders:
a. The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the plan of merger or share exchange.
b. G.S. 55‑8‑26 applies.
(2) The shareholders
entitled to vote must approve the plan.plan of merger or share
exchange.
(e) Unless this Chapter, the articles of incorporation, a bylaw adopted by the shareholders, or the board of directors (acting pursuant to subsection (c)) require a greater vote, the plan of merger or share exchange to be authorized must be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group and, for the purpose of Article 9 or any provision in the articles of incorporation or bylaws adopted prior to July 1, 1990, a merger shall be deemed to include a share exchange. If any shareholder of a merging corporation has or will have personal liability for any existing or future obligation of the surviving corporation in the merger solely as a result of owning one or more shares in the surviving corporation, then, in addition to the requirements of this subsection, authorization of the plan of merger by the merging corporation shall require the affirmative vote or written consent of that shareholder.
(f) Separate voting by
voting groups is required:required for the following:
(1) On a plan of merger if
the plan contains a provision that, if contained in a proposed amendment to
articles of incorporation, would require action by one or more separate voting
groups on the proposed amendment under G.S. 55‑10‑04, except
where the consideration to be received in exchange for the shares of that group
consists solely of cash;cash.
(2) On a plan of share exchange by each class or series of shares to be acquired in the exchange, with each class or series constituting a separate voting group.
."
SECTION 10. G.S. 55‑11‑04 reads as rewritten:
"§
55‑11‑04. Merger with subsidiary.between parent and
subsidiary or between subsidiaries.
(a) Subject to Article 9, a
parent corporation owning shares of a domestic or foreign subsidiary
corporation that carry at least ninety percent (90%) of the outstanding
sharesvoting power of each class and series of athe
outstanding shares of the subsidiary corporation that have the current
power to vote in the election of directors may merge the subsidiary into
itself or into another such subsidiary without approval of the
shareholders of the parent corporation unless the articles of incorporation of
the parent corporation require approval of the shareholders or the plan of
merger contains one or more amendments to the articles of incorporation of the parent
corporation for which shareholder approval is required by G.S. 55‑10‑03,
and without approval of the board of directors or shareholders of the
subsidiary corporation unless the articles of incorporation of the subsidiary
corporation require approval of the shareholders of the subsidiary corporation.corporation,
or if the subsidiary is a foreign corporation, approval by the subsidiary's
board of directors or shareholders is required by the laws under which the
subsidiary is organized. Subject to Article 9, a parent corporation owning shares
of a domestic or foreign subsidiary corporation that carry at least ninety
percent (90%) of the outstanding sharesvoting power of each class
and series of athe outstanding shares of the subsidiary
corporation that have the current power to vote in the election of directors
may merge itself into the subsidiary corporation without approval of the
board of directors or shareholders of the subsidiary corporation unless the
articles of incorporation of the subsidiary corporation provide otherwise orotherwise,
the plan of merger contains one or more amendments to the articles of
incorporation of the subsidiary corporation for which shareholder approval is
required by G.S. 55‑10‑03.G.S. 55‑10‑03,
or, if the subsidiary is a foreign corporation, approval by the subsidiary's
board of directors or shareholders is required by the laws under which the
subsidiary is organized. Except as otherwise provided in this subsection,
the provisions of G.S. 55‑11‑01 and G.S. 55‑11‑03
apply to any merger described in this subsection.
(b) If a merger is consummated without approval of the subsidiary corporation's shareholders, the surviving corporation shall, within 10 days after the effective date of the merger, notify each shareholder of the subsidiary corporation as of the effective date of the merger, that the merger has become effective.
(c) Repealed by Session Laws 2005, c. 268, s. 21.
(d) Repealed by Session Laws 2005, c. 268, s. 21.
(e) Repealed by Session Laws 2005, c. 268, s. 21.
(f) The provisions of G.S. 55‑13‑02(c)G.S. 55‑13‑02(b)
do not apply to subsidiary corporations that are parties to mergers consummated
under this section."
SECTION 11. G.S. 55‑11A‑11 reads as rewritten:
"§ 55‑11A‑11. Plan of conversion.
(a) The converting domestic
corporation shall approve a written plan of conversion containing:containing
all of the following:
(1) The name of the
converting domestic corporation;corporation.
(2) The name of the
resulting business entity into which the domestic corporation shall convert,
its type of business entity, and the state or country whose laws govern its
organization and internal affairs;affairs.
(3) The terms and conditions
of the conversion; andconversion.
(4) The manner and basis for converting the shares of the domestic corporation into interests, obligations, or securities of the resulting business entity or into cash or other property in whole or in part.
(a1) The plan of conversion may contain other provisions relating to the conversion.
(a2) The provisions of the plan of conversion, other than the provisions required by subdivisions (1) and (2) of subsection (a) of this section, may be made dependent on facts objectively ascertainable outside the plan of conversion if the plan of conversion sets forth the manner in which the facts will operate upon the affected provisions. The facts may include any of the following:
(1) Statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data.
(2) A determination or action by the converting domestic corporation or by any other person, group, or body.
(3) The terms of, or actions taken under, an agreement to which the converting domestic corporation is a party, or any other agreement or document.
(b) ForThe
following requirements shall be met for a plan of conversion to be
approved:
(1) The board of directors
shall recommend to the shareholders that the plan of conversion to
the shareholders,be approved, unless the board of directors
determines that because of conflict of interest or other special circumstances
it should make no recommendation, in which event the board of directors shall
communicate the basis for its lack of a recommendation to the shareholders with
the plan; andone of the following circumstances exist, in which event
the board of directors shall communicate the basis for not recommending
approval of the plan of conversion to the shareholders at the time it submits
the plan of conversion to the shareholders:
a. The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the plan of conversion.
b. G.S. 55‑8‑26 applies.
(2) The shareholders
entitled to vote shall approve the plan.plan of conversion.
."
SECTION 12. G.S. 55‑12‑01 reads as rewritten:
"§
55‑12‑01. SaleDisposition of assets in regular
course of businessnot requiring shareholder approval and mortgage of
assets.
(a) A mortgage of or other security interest in all or any part of the property of a corporation may be made by authority of the board of directors without approval of the shareholders, unless otherwise provided in the articles of incorporation or in bylaws adopted by the shareholders.
(b) Unless otherwise
provided in the articles of incorporation or in bylaws adopted by the
shareholders, a corporation may, on the terms and conditions and for the
consideration determined by the board of directors, and without approval by the
shareholders:shareholders, do any of the following:
(1) Sell, lease, exchange,
or otherwise dispose of all, or substantially all, of its property in the usual
and regular course of business; orbusiness.
(2) Transfer any or all of its property to a corporation or an unincorporated entity all the shares or ownership interests of which are owned by the corporation.
(3) Sell, lease, exchange, or otherwise dispose of any of its property, not in the usual and regular course of business, if the sale, lease, exchange, or other disposition is of less than all, or substantially all, of the corporation's property. If the sale, lease, exchange, or other disposition would leave the corporation with a continuing business activity that represented at least twenty‑five percent (25%) of total assets at the end of the most recently completed fiscal year and at least twenty‑five percent (25%) of either (i) income from continuing operations before taxes or (ii) revenues from continuing operations for that fiscal year, in each case of the corporation and its subsidiaries on a consolidated basis, the sale, lease, exchange, or other disposition will conclusively be deemed to be of less than all, or substantially all, of the corporation's property."
SECTION 13. G.S. 55‑12‑02 reads as rewritten:
"§
55‑12‑02. SaleDisposition of assets other than in
regular course of business.requiring shareholder approval.
(b) ForThe
following requirements shall be met for a transaction to be authorized:
(1) The board of directors mustshall
recommend to the shareholders that the proposed transaction to the
shareholdersbe approved unless the board of directors determines
that because of conflict of interest or other special circumstances it should
make no recommendation, in which event the board of directors must communicate
the basis for its lack of a recommendation to the shareholders with the
submission of the proposed transaction; andone of the following
circumstances exist, in which event the board of directors shall communicate
the basis for not recommending approval of the proposed transaction to the
shareholders at the time it submits the proposed transaction to the
shareholders:
a. The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the proposed transaction.
b. G.S. 55‑8‑26 applies.
(2) The shareholders
entitled to vote must approve the transaction.proposed transaction.
."
SECTION 14. G.S. 55‑14‑02(b) reads as rewritten:
"(b) ForThe
following requirements shall be met for a proposal to dissolve to be
adopted:
(1) The board of directors mustshall
recommend dissolution to the shareholdersto the shareholders that the
proposal to dissolve be approved unless the board of directors
determines that because of conflict of interest or other special circumstances
it should make no recommendation, in which event the board of directors must
communicate the proposal and the basis for its lack of a recommendation to the
shareholders; andone of the following circumstances exist, in which
event the board of directors shall communicate the basis for not recommending
approval of the proposal to dissolve to the shareholders at the time it submits
the proposal to dissolve to the shareholders:
a. The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the proposal to dissolve.
b. G.S. 55‑8‑26 applies.
(2) The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e)."
SECTION 15. The Revisor of Statutes may cause to be printed all relevant portions of the Official Comments to the Model Business Corporation Act and all explanatory comments of the drafters of this act as the Revisor deems appropriate.
SECTION 16. This act becomes effective January 1, 2014.
In the General Assembly read three times and ratified this the 10th day of June, 2013.
s/ Daniel J. Forest
President of the Senate
s/ Thom Tillis
Speaker of the House of Representatives
s/ Pat McCrory
Governor
Approved 4:26 p.m. this 19th day of June, 2013