GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
SESSION LAW 2021-162
HOUSE BILL 320
AN ACT to modify authorization to conduct meetings by means of remote communication for certain entities, TO authorize nonprofit corporations to conduct all business electronically unless prohibited in their articles of incorporation or bylaws, TO make technical changes in the surrounding language, and to exempt certain not‑for‑profit corporations formed prior to july 1, 1989, from being required to have at least one class of shares with unlimited voting rights.
The General Assembly of North Carolina enacts:
Part I. authorize shareholder meetings to be held solely by means of remote communication
SECTION 1.(a) G.S. 55‑7‑01 reads as rewritten:
"§ 55‑7‑01. Annual meeting.
(a) A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.
(b) Annual Unless
the board of directors determines to hold the meeting solely by means of remote
communication in accordance with G.S. 55‑7‑09(c), annual shareholders'
meetings may be held (i) in or out of this State at the place stated in
or fixed in accordance with the bylaws. If bylaws, or (ii) if no
place is stated in or fixed in accordance with the bylaws, annual meetings
shall be held at the corporation's principal office.
…."
SECTION 1.(b) G.S. 55‑7‑02 reads as rewritten:
"§ 55‑7‑02. Special meeting.
(a) A corporation shall hold
a special meeting of shareholders:shareholders if either of the
following applies:
(1) On call of its board of
directors or the person or persons authorized to do so by the articles of
incorporation or the bylaws; orbylaws.
…
(c) Special Unless
the board of directors determines to hold the meeting solely by means of remote
communication in accordance with G.S. 55‑7‑09(c), special shareholders'
meetings may be held (i) in or out of this State at the place stated in
or fixed in accordance with the bylaws. If bylaws or (ii) if no
place is stated or fixed in accordance with the bylaws, special meetings
shall be held at the corporation's principal office.
…."
SECTION 1.(c) G.S. 55‑7‑05 reads as rewritten:
"§ 55‑7‑05. Notice of meeting.
(a) A corporation shall
notify shareholders of the date, time, and place place, if any, 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.
…
(e) Unless the bylaws
require otherwise, if an annual or special shareholders' meeting is adjourned
to a different date, time, or place, if any, notice need not be given of
the new date, time, or place place, if any, if the new date,
time, or place is following are announced at the meeting before adjournment.adjournment:
(1) The new date, time, or place, if any.
(2) If the meeting is to be continued solely by means of remote communication, a description of the means of remote communication.
If a new record date for the adjourned meeting is or must be fixed under G.S. 55‑7‑07, however, notice of the adjourned meeting must be given under this section to persons who are shareholders as of the new record date.
(f) After a public corporation has notified shareholders of the date, time, and place of an annual or special shareholders' meeting in accordance with subsection (a) of this section, further notification in accordance with subsection (a) of this section is not required if all of the following apply:
(1) A governmental order restricting travel or group gatherings applicable to the place of the shareholders' meeting or public corporation's principal office is in effect and is anticipated in good faith by the board of directors to be in effect at the date and time set forth in the initial notification, including by an anticipated extension of an existing order.
(2) The public corporation's board of directors determines that the shareholders' meeting is instead to be held solely by means of remote communication in accordance with G.S. 55‑7‑09(c) at the same date and time set forth in the initial notification or at a different date and time.
(3) The public corporation (i) promptly issues a press release for national dissemination announcing the determination of its board of directors that the shareholders' meeting is to be held solely by means of remote communication and describing the means of remote communication to be used and providing the date and time of the shareholders' meeting to be held solely by means of remote communication and (ii) files the press release with the Securities and Exchange Commission as close to the time the press release is issued as practicable and approximately contemporaneously posts such press release to its corporate website."
SECTION 1.(d) G.S. 55‑7‑09 reads as rewritten:
"§ 55‑7‑09. Remote participation in meetings.meetings;
meetings held solely by remote participation.
(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 are deemed present and may vote at such a the 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.
(c) Unless shareholders' meetings held solely by means of remote communication are prohibited by the articles of incorporation or the bylaws, the board of directors may, in its sole discretion, determine that any meeting of shareholders shall not be held at any place and shall instead be held solely by means of remote communication, but only if the corporation implements the measures specified in subsection (b) of this section."
SECTION 1.(e) G.S. 55‑7‑20 reads as rewritten:
"§ 55‑7‑20. Shareholders' list for meeting.
(a) After fixing a record
date for a meeting, a corporation shall prepare an alphabetical list of the
names of all its shareholders who are entitled to notice of a shareholders'
meeting. The list must shall be arranged by voting group (and
within each voting group group, by class or series of shares) shares
within each voting group, and shall show the address of and number
of shares held by each shareholder.
(b) The shareholders' list must
shall be available for inspection by any shareholder, beginning two
business days after notice of the meeting is given for which the list was
prepared and continuing through the meeting, (i) at the corporation's
principal office or at a place identified in the meeting notice in the city
where the meeting will be held. held or (ii) on a reasonably
accessible electronic network, provided that the information required to gain
access to the list is provided with the notice of the meeting. In the event
that the corporation determines to make the list available on an electronic
network, the corporation may take reasonable steps to ensure that the
information is available only to shareholders of the corporation. A
shareholder, personally or by or with his the shareholder's representative,
is entitled on written demand to inspect and, subject to the requirements of
G.S. 55‑16‑02(c), to copy the list, during regular business
hours and at his the shareholder's expense, during the period it
is available for inspection.
(c) The If the
meeting is to be held at a place, the corporation shall make the
shareholders' list available at the meeting, and any shareholder, personally or
by or with his the shareholder's representative, is entitled to
inspect the list at any time during the meeting or any adjournment. The If
the meeting is to be held at a place, 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. 55‑7‑09. If the meeting is to be held
solely by means of remote communication, then the list shall also be open to
inspection during the meeting on a reasonably accessible electronic network,
and the information required to access the list shall be provided with the
notice of the meeting.
(d) If the corporation
refuses to allow a shareholder or his the shareholder's representative
to inspect the shareholders' list before or at the meeting (or meeting,
or copy the list as permitted by subsection (b)), (b), the
superior court of the county where a corporation's principal office (or, if
none in this State, its registered office) is located, or, if the
corporation has no principal office in this State, the superior court of the
county where the corporation's registered office is located, on application
of the shareholder, after notice is given to the corporation, may summarily
order the inspection or copying at the corporation's expense and may postpone the
meeting for which the list was prepared until the inspection or copying is
complete.
(e) Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting."
SECTION 1.(f) G.S. 55‑10‑22 reads as rewritten:
"§ 55‑10‑22. Bylaw increasing quorum or voting
requirement for directors.directors or prohibiting a meeting of
shareholders solely by remote participation.
(a) A bylaw that fixes a
greater quorum or voting requirement for the board of directors or that
prohibits a meeting of shareholders solely by means of remote communication may
be amended or repealed:repealed as follows:
(1) If originally adopted by
the shareholders, only by the shareholders, unless amendment or repeal by the
board of directors is permitted pursuant to subsection (b);(b) of
this section.
(2) If originally adopted by the board of directors, either by the shareholders or by the board of directors.
(b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.
(c) A The
following applies to a bylaw referred to in subsection (a):(a) of
this section.
(1) May It shall not
be adopted by the board of directors by a vote less than a majority of the
directors then in office, andoffice.
(2) May It shall not
itself be amended by a quorum or vote of the directors less than the quorum or
vote therein prescribed or prescribed by the shareholders pursuant to
subsection (b).(b) of this section."
SECTION 1.(g) The Revisor of Statutes shall cause to be printed, as annotations to the published General Statutes, all relevant portions of the Official Comments to the Revised Model Business Corporation Act and all explanatory comments of the drafters of this section as the Revisor may deem appropriate.
part II. authorize nonprofit member meetings to be held by means of remote communication; authorize nonprofits to conduct all business electronically unless prohibited by the nonprofit
SECTION 2.(a) G.S. 55A‑1‑40(26) reads as rewritten:
"§ 55A‑1‑40. Chapter definitions.
In this Chapter unless otherwise specifically provided:
…
(26) "Vote" includes authorization by written ballot and written consent, including through an electronic voting system or electronic ballot and electronic consent."
SECTION 2.(b) G.S. 55A‑1‑41 reads as rewritten:
"§ 55A‑1‑41. Notice.
…
(c) Written notice by a
domestic or foreign corporation to its member is effective when deposited in
the United States mail with postage thereon prepaid and correctly
addressed to the member's address shown in the corporation's current record of
members. To the extent the corporation pursuant to G.S. 55A‑1‑70
and the member have agreed, notice Notice by a domestic corporation to
its member in the form of an electronic record sent by electronic means to
a member who has designated an email address as provided in G.S. 55A‑1‑70(b)
is effective when it is sent as provided in G.S. 66‑325. A
member may terminate any such agreement at any time on a prospective basis effective
upon written notice of termination to the corporation or upon such later date
as may be specified in the notice.
(d) Written notice to a
domestic or foreign corporation (authorized authorized to conduct
affairs in this State) State may be addressed to its registered
agent at its registered office or to the corporation or its secretary at its
principal office shown in its articles of incorporation, the Designation of
Principal Office Address form, or any Corporation's Statement of Change of Principal
Office Address form filed with the Secretary of State.
(e) Except as provided in subsection (c) of this section, written notice is effective at the earliest of the following:
(1) When received;received.
(2) Five days after its
deposit in the United States mail, as evidenced by the postmark or otherwise,
if mailed with at least first‑class postage thereon prepaid and correctly
addressed;addressed.
(3) On the date shown on the
return receipt, if sent by registered or certified mail, return receipt requested,
and the receipt is signed by or on behalf of the addressee;addressee.
(4) If mailed with less than
first‑class postage, 30 days after its deposit in the United States mail,
as evidenced by the postmark or otherwise, if mailed with postage thereon
prepaid and correctly addressed;addressed.
(5) When delivered to the member's address shown in the corporation's current list of members.
In the case of notice in the form of an electronic record sent by electronic means, the time of receipt shall be determined as provided in G.S. 66‑325.
(f) Written notice is
correctly addressed to a member of a domestic or foreign corporation if
addressed to the member's address shown in the corporation's current list of
members. In the case of members who are residents of the same household and who
have the same address, the corporation's bylaws may provide that a single
notice may be given to such the members jointly.
…."
SECTION 2.(c) G.S. 55A‑1‑70 reads as rewritten:
"§ 55A‑1‑70. Electronic transactions.
(a) A corporation may conduct a transaction by electronic means, except as limited by its articles of incorporation or bylaws or by action of its board of directors.
(b) Members who wish to communicate and conduct business with a corporation by electronic means shall first designate the email address to be used for communication and business between the member and the corporation and shall provide any other information required by the corporation to facilitate communication and business conducted between the member and the corporation. The corporation shall inform the members on how to designate an email address, of any additional information the corporation requires and how to provide it, and on how to update an email address and other required information previously provided.
(c) For purposes of applying Article 40 of Chapter 66
of the General Statutes to transactions under this Chapter, a corporation may
agree that conducts an electronic transaction in accordance with this
section is deemed to have agreed to conduct a the transaction
by electronic means through provision in its articles of incorporation or
bylaws or by action of its board of directors.means."
SECTION 2.(d) G.S. 55A‑2‑07 reads as rewritten:
"§ 55A‑2‑07. Emergency bylaws.
(a) Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt, amend, or repeal bylaws to be effective only in an emergency defined in subsection (d) of this section. The emergency bylaws, which are subject to amendment or repeal by the members, may make all provisions necessary for managing the corporation during the emergency, including:
(1) Procedures for calling a meeting of the board of directors;
(2) Quorum requirements for the meeting; and
(3) Designation of additional or substitute directors.
(b) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.
(c) Corporate action taken in good faith in accordance with the emergency bylaws binds the corporation, and the fact that the action was taken pursuant to emergency bylaws shall not be used to impose liability on a corporate director, officer, employee, or agent.
(d) An emergency exists for
purposes of this section if a quorum of the corporation's directors cannot
readily be assembled because of some catastrophic event.if a natural or
man‑made disaster impedes the ability of the corporation's board of
directors or members to comply with one or more provisions of the corporation's
bylaws."
SECTION 2.(e) G.S. 55A‑3‑03(d) reads as rewritten:
"§ 55A‑3‑03. Emergency powers.
…
(d) An emergency exists for
purposes of this section if a quorum of the corporation's directors cannot
readily be assembled because of some catastrophic event.natural or man‑made
disaster impedes the ability of the corporation's board of directors or members
to comply with one or more provisions of the corporation's bylaws."
SECTION 2.(f) G.S. 55A‑7‑01 reads as rewritten:
"§ 55A‑7‑01. Annual and regular meetings.
(a) A corporation having
members with the right to vote for directors shall hold a meeting of such the
members annually.
(b) A corporation with members may hold regular membership meetings at the times stated in or fixed in accordance with the bylaws.
(c) Annual and regular
membership meetings may be held (i) in person in or out of this State at
the place stated in or fixed in accordance with the bylaws. bylaws or
(ii) by means of remote communication, as provided in G.S. 55A‑7‑09.
If no place is stated in or fixed in accordance with the bylaws, in‑person
annual and regular meetings shall be held at the corporation's principal
office.
…."
SECTION 2.(g) G.S. 55A‑7‑02 reads as rewritten:
"§ 55A‑7‑02. Special meeting.
(a) A corporation with
members shall hold a special meeting of members:members in any of the
following circumstances:
(1) On call of its board of
directors or the person or persons authorized to do so by the articles of
incorporation or bylaws; orbylaws.
(2) Within 30 days after the holders of at least ten percent (10%) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation's secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held.
(b) If not otherwise fixed under G.S. 55A‑7‑03 or G.S. 55A‑7‑07, the record date for determining members entitled to demand a special meeting is the date the first member signs the demand.
(c) Special meetings of
members may be held (i) in person in or out of this State at the place
stated in or fixed in accordance with the bylaws. bylaws or (ii) by
means of remote communication as provided in G.S. 55A‑7‑09. If
no place is stated or fixed in accordance with the bylaws, in‑person special
meetings shall be held at the corporation's principal office.
(d) Only those matters that are within the purpose or purposes described in the meeting notice required by G.S. 55A‑7‑05 may be acted upon at a special meeting of members."
SECTION 2.(h) G.S. 55A‑7‑03 reads as rewritten:
"§ 55A‑7‑03. Court‑ordered meeting.
(a) The superior court of
the county where a corporation's principal office, or, if there is none in this
State, its registered office, is located may, after notice is given to the
corporation and upon such further notice and opportunity to be heard, if any,
as the court may deem appropriate under the circumstances, summarily order a
meeting to be held:held in any of the following circumstances:
(1) On application of any
member if an annual meeting was not held within 15 months after the
corporation's last annual meeting; ormeeting.
(2) On application of a member who signed a demand for a special meeting valid under G.S. 55A‑7‑02, if the corporation has not held the meeting as required by that section.
(b) The court may fix the
time and place of the meeting, specify a record date for determining those
persons entitled to notice of and to vote at the meeting, prescribe the form
and content of the meeting notice, fix the quorum required for specific matters
to be considered at the meeting (or or direct that the votes
represented at the meeting constitute a quorum for action on those matters),
matters, and enter other orders necessary to accomplish the purpose
or purposes of the meeting. The court may order that the meeting be held by
means of remote communication as provided in G.S. 55A‑7‑09.
(c) If the court orders a
meeting, it may also order the corporation to pay all or part of the member's costs
(including costs, including reasonable attorneys' fees) fees,
incurred to obtain the order."
SECTION 2.(i) G.S. 55A‑7‑04 reads as rewritten:
"§ 55A‑7‑04. Action by written consent.
(a) Action required or
permitted by this Chapter to be taken at a meeting of members may be taken
without a meeting if the action is taken by all members entitled to vote on the
action. The action shall be evidenced by one or more written consents
describing the action taken, signed before or after such action by all members
entitled to vote thereon, on the action, and delivered to the
corporation for inclusion in the minutes or filing with the corporate records. To
the extent the corporation has agreed pursuant to G.S. 55A‑1‑70, Except
as limited by the articles of incorporation or bylaws, a member's consent
to action taken without a meeting may be in electronic form and delivered by
electronic means.
…."
SECTION 2.(j) G.S. 55A‑7‑05 reads as rewritten:
"§ 55A‑7‑05. Notice of meeting.
…
(c) Notice is fair and
reasonable if:if it conforms to all of the following:
(1) The corporation gives
notice to all members entitled to vote at the meeting of the place, place,
if any, date, and time of each annual, regular, and special meeting of
members no fewer than 10, or, if notice is mailed by other than first class,
registered or certified mail, no fewer than 30, nor more than 60 days before
the meeting date;date.
(1a) If the meeting will be held by means of remote communication, the notice shall include all the information required by G.S. 55A‑7‑09.
(2) Notice of an annual or
regular meeting includes a description of any matter or matters that shall be
approved by the members under G.S. 55A‑8‑31, 55A‑8‑55,
55A‑10‑03, 55A‑10‑21, 55A‑11‑04, 55A‑12‑02,
or 55A‑14‑02; and55A‑14‑02.
(3) Notice of special meeting includes a description of the matter or matters for which the meeting is called.
(d) Unless the bylaws require otherwise, if an annual, regular, or special meeting of members is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time, or place is announced at the meeting before adjournment. If the meeting is to be continued by means of remote communication, the announcement shall also include a description of the means of remote communication. If a new record date for the adjourned meeting is or must be fixed under G.S. 55A‑7‑07, however, notice of the adjourned meeting shall be given under this section to the members of record entitled to vote at the meeting as of the new record date.
(e) When giving notice of an
annual, regular, or special meeting of members, a corporation shall give notice
of a matter a member intends to raise at the meeting if:if all of the
following apply:
(1) Requested The
corporation is requested in writing to do so by a person or persons
entitled to call a special meeting pursuant to G.S. 55A‑7‑02;
andG.S. 55A‑7‑02.
(2) The request is received by the secretary or president of the corporation at least 10 days before the corporation gives notice of the meeting."
SECTION 2.(k) G.S. 55A‑7‑06 reads as rewritten:
"§ 55A‑7‑06. Waiver of notice.
…
(b) A member's attendance at
a meeting:meeting in person or by means of remote communication waives
objection to all of the following:
(1) Waives objection to
lack Lack of notice or defective notice of the meeting, unless the
member at the beginning of the meeting objects to holding the meeting or
conducting business at the meeting; andmeeting.
(2) Waives objection to
consideration Consideration of a particular matter at the meeting
that is not within the purpose or purposes described in the meeting notice,
unless the member objects to considering the matter before it is voted upon.upon
in an in‑person meeting."
SECTION 2.(l) G.S. 55A‑7‑08 reads as rewritten:
"§ 55A‑7‑08. Action Member action by
written ballot.ballot or electronic voting without a meeting.
(a) Unless prohibited or
limited by the articles of incorporation or bylaws and without regard to the
requirements of G.S. 55A‑7‑04, any action that may be taken at
any annual, regular, or special meeting of members may be taken without a
meeting if the corporation delivers a written ballot to every member
entitled to vote on the matter. Any requirement that any vote of the members be
made by written ballot may be satisfied by a ballot submitted by electronic
transmission, including electronic mail, provided that such electronic
transmission shall either set forth or be submitted with information from which
it can be determined that the electronic transmission was authorized by the
member or the member's proxy.by written ballots or electronic voting as
follows:
(2) Electronic voting. – For members who have complied with G.S. 55A‑1‑70, the corporation may provide an electronic ballot or electronic notice that sets forth each proposed action and provides an opportunity and instructions on how to vote for or against each proposed action using the electronic ballot or an electronic voting system.
(b) A written ballot shall:
(1) Set forth each proposed action; and
(2) Provide an opportunity to vote for or against
each proposed action.
(c)(b) All members
entitled to vote on the matter shall be given the opportunity to vote on the
proposed action by written ballot or electronic voting, or both. The board of
directors may determine, in its discretion, whether votes shall be cast by
written ballots or by electronic voting, or by both, provided that votes may be
cast solely by electronic voting only if all members entitled to vote on the
proposed action have complied with G.S. 55A‑1‑70(b). Approval
by written ballot or electronic voting, or both, pursuant to this
section shall be valid only when the number of votes cast by written ballot
or electronic voting, or both, equals or exceeds the quorum required to
be present at a meeting authorizing the action, and the number of approvals
equals or exceeds the number of votes that would be required to approve the
matter at a meeting at which the same total number of votes were cast.
(d)(c) All written
ballots or solicitations for votes by written ballot ballot, all
electronic ballots or solicitations for votes by electronic ballot, and all
electronic voting notices shall indicate the time by which a written or
electronic ballot shall be received by the corporation or by which
electronic votes shall be cast in order to be counted. The deadline for
the return of written ballots and electronic ballots and for the casting of
electronic votes on any proposed action shall be identical.
(e)(d) Except as
otherwise provided in the articles of incorporation or bylaws, a written
ballot any written ballot, electronic ballot, or electronic vote that is
submitted shall not be revoked."
SECTION 2.(m) Article 7 of Chapter 55A of the General Statutes is amended by adding a new section to read:
"§ 55A‑7‑09. Remote participation in meetings; meetings held solely by remote participation.
(a) Members of any class may participate in any meeting of members by means of remote communication to the extent the board of directors authorizes the participation for that class. Participation as a member by means of remote communication is subject to any guidelines and procedures the board of directors adopts and the requirements of subsection (b) of this section.
(b) Members participating by means of remote communication are deemed present and may vote at the meeting if the corporation has implemented reasonable measures to do all of the following:
(1) Verify that each person participating remotely as a member is a member.
(2) Provide the members a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members to the same extent they could participate and vote if present in person, including an opportunity to communicate and to read or hear the proceedings of the meeting, substantially concurrently with the proceedings.
(c) Unless member meetings held solely by means of remote communication are prohibited by the articles of incorporation or the bylaws, the board of directors may, in its sole discretion, determine that any meeting of members shall not be held at any place and shall instead be held solely by means of remote communication but only if the corporation implements the measures specified in subsection (b) of this section.
(d) In addition to the information required by G.S. 55A‑7‑05, notice of a meeting held solely by means of remote communication shall include notice that the meeting will be held solely by means of remote communication and sufficient instruction and information on how members may join the meeting remotely."
SECTION 2.(n) G.S. 55A‑7‑20 reads as rewritten:
"§ 55A‑7‑20. Members' list for meeting.
…
(b) Beginning two business
days after notice is given of the meeting for which the list was prepared and
continuing through the meeting, the list of members shall be available for
inspection by any member for the purpose of communication with other members
concerning the meeting. The list shall be available (i) at the
corporation's principal office or at a reasonable place identified in the
meeting notice in the city where the meeting will be held for inspection by
any member for the purpose of communication with other members concerning the
meeting. or (ii) on a reasonably accessible electronic network, provided
that the information required to gain access to the list is provided with the
notice of the meeting. In the event that the corporation determines to make the
list available on an electronic network, the corporation may take reasonable
steps to ensure that the information is available only to shareholders of the
corporation. A member, personally or by or with his the member's representatives,
is entitled on written demand to inspect and, subject to the limitations of
G.S. 55A‑16‑02(c) and G.S. 55A‑16‑05 and at his
the member's expense, to copy the list at a reasonable time during
the period it is available for inspection.
(c) The If the
meeting is to be held at a place, the corporation shall make the list of
members available at the meeting, and any member, personally or by or with his
the member's representatives, is entitled to inspect the list at any
time during the meeting or any adjournment. If the meeting is to be held
solely by means of remote communication, then the list shall also be open to
inspection during the meeting on a reasonably accessible electronic network,
and the information required to access the list shall be provided with the
notice of the meeting.
(d) If the corporation
refuses to allow a member or his the member's representative to
inspect or copy the list of members as permitted in subsections (b) and (c) of
this section, the superior court of the county where a corporation's principal office
(or, office, or, if there is none in this State, its registered office)
office, is located, on application of the member, after notice is
given to the corporation and upon such further evidence, notice and opportunity
to be heard, if any, as the court may deem appropriate under the circumstances,
may summarily order the inspection or copying at the corporation's expense. The
court may postpone the meeting for which the list was prepared until the
inspection or copying is complete and may order the corporation to pay the
member's costs, including reasonable attorneys' fees, incurred to obtain the
order.
…."
SECTION 2.(o) G.S. 55A‑7‑24 reads as rewritten:
"§ 55A‑7‑24. Proxies.
(a) Unless the articles of
incorporation or bylaws prohibit or limit proxy voting, a member may vote in
person or by proxy. A member may appoint one or more proxies to vote or
otherwise act for the member by signing an appointment form, either personally
or by the member's attorney‑in‑fact. Without limiting G.S. 55A‑1‑70,
an An appointment in the form of an electronic record submitted
by a member who has agreed as provided in G.S. 55A‑1‑70 that
either bears the member's electronic signature or is sent from the
member's designated email address and that may be directly reproduced in
paper form by an automated process shall be deemed a valid appointment form
within the meaning of this section. In addition, if and to the extent permitted
by the nonprofit corporation, a member may appoint one or more proxies by any
kind of telephonic transmission, even if not accompanied by written
communication, under circumstances or together with information from which the
nonprofit corporation can reasonably assume that the appointment was made or
authorized by the member.
…
(c) An appointment of a
proxy is revocable by the member unless the appointment form conspicuously states
that it is irrevocable and the appointment is coupled with an interest. An
appointment made irrevocable under this subsection shall be revocable when the
interest with which it is coupled is extinguished. A transferee for value of an
interest subject to an irrevocable appointment may revoke the appointment if he
the transferee did not have actual knowledge of its irrevocability.
…
(e) A revocable appointment
of a proxy is revoked by the person appointing the proxy:proxy doing
any of the following:
(1) Attending any meeting and
voting in person; orperson.
(2) Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing stating that the appointment of the proxy is revoked or a subsequent appointment form.
…."
SECTION 2.(p) G.S. 55A‑8‑20 reads as rewritten:
"§ 55A‑8‑20. Regular and special meetings.
(a) The board of directors may hold regular or special meetings in or out of this State.
(b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear and be heard by each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting."
SECTION 2.(q) G.S. 55A‑8‑21 reads as rewritten:
"§ 55A‑8‑21. Action without meeting.
(a) Unless the articles of
incorporation or bylaws provide otherwise, action required or permitted by this
Chapter to be taken at a board of directors' meeting may be taken without a
meeting if the action is taken by all members of the board. The action shall be
evidenced by one or more written consents signed by each director before or
after such the action, describing the action taken, and included
in the minutes or filed with the corporate records reflecting the action taken.
To the extent the corporation has agreed pursuant to G.S. 55A‑1‑70,
As authorized in G.S. 55A‑1‑70, a director's
consent to action taken without meeting may be in electronic form and delivered
by electronic means.
…."
Part III. Authorize insurance policyholder meetings to be held remotely
SECTION 3. G.S. 58‑8‑10 reads as rewritten:
"§ 58‑8‑10. Policyholders are members of mutual companies.
(a) Every person insured by a mutual insurance company
is a member while that person's policy is in force, entitled to one vote for
each policy that person holds, and must shall be notified of the (i)
time and (ii) place of or method of remote communication,
or both, for holding the company's meetings by a written notice or by an
imprint upon the back of each policy, receipt, or certificate of renewal, as
follows:
(1) If the meetings are to be held at a place, as follows: The insured is hereby notified that by virtue of this policy the insured is a member of the ______ insurance company, and that the annual meetings of the company are held at its home office on the ______ day of ______, in each year, at ______ o'clock.
(2) If the meetings are to be held solely by remote communication, as follows: The insured is hereby notified that by virtue of this policy the insured is a member of the ______ insurance company, and that the annual meetings of the company are held by means of remote communication, which can be accessed by ______ on the ______ day of ______, in each year, at ______ o'clock.
(3) If the meetings are to be held at a place and by remote communication, as follows: The insured is hereby notified that by virtue of this policy the insured is a member of the ______ insurance company, and that the annual meetings of the company are held at its home office and by means of remote communication, which can be accessed by ______ on the ______ day of ______, in each year, at ______ o'clock.
(b) The blanks in subsection (a) of this section shall be duly filled in print and are a sufficient notice. A corporation that becomes a member of a mutual insurance company may authorize any person to represent the corporation; and this representative has all the rights of an individual member. A person holding property in trust may insure it in a mutual insurance company, and as trustee assume the liability and be entitled to the rights of a member; but is not personally liable upon the contract of insurance. Members may vote by proxies, dated and executed within one year after receipt, and returned and recorded on the books of the company three days or more before the meeting at which they are to be used.
(c) 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 (d) of this section.
(d) Members participating in meetings by means of remote communication shall be deemed (i) present and (ii) voting in person at the meeting if the mutual insurance company has implemented reasonable measures to do all of the following:
(1) Verify that each person participating remotely is a member.
(2) Provide each member participating remotely a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate and read or hear the proceedings of the meeting, substantially concurrently with the proceedings.
(e) The board of directors may, in its sole discretion, determine that any meeting of members shall not be held at any place and shall instead be held solely by means of remote communication, but only if the mutual insurance company implements the measures specified in subsection (d) of this section."
PART IV. EXEMPT CERTAIN NOT‑FOR‑PROFIT CORPORATIONS FORMED PRIOR TO JULY 1, 1989, FROM BEING REQUIRED TO HAVE AT LEAST ONE CLASS OF SHARES WITH UNLIMITED VOTING RIGHTS
SECTION 4. G.S. 55‑6‑01(c) reads as rewritten:
"§ 55‑6‑01. Authorized shares.
…
(c) The articles of incorporation must authorize
(1) One or more classes of shares that together have unlimited voting rights, provided, however, that this subdivision shall not apply to articles of incorporation of not‑for‑profit corporations formed for religious, charitable, nonprofit, social, or literary purposes prior to July 1, 1989, and
(2) One or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution."
PART V. SEVERABILITY CLAUSE
SECTION 5. If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.
PART VI. Effective date and applicability
SECTION 6. This act is effective when it becomes law. Sections 1, 2, and 3 of this act apply to meetings noticed on or after that date. Remote shareholder, policyholder, and member meetings noticed before the effective date of this act as a result of the state of emergency declared by Executive Order No. 116 on March 10, 2020, and complying with any subsequent executive orders authorizing remote shareholder, policy holder, or member meetings shall be deemed in compliance with this act. Section 4 of this act applies to not‑for‑profit corporations formed prior to July 1, 1989, existing as of the effective date of this act.
In the General Assembly read three times and ratified this the 16th day of September, 2021.
s/ Carl Ford
Presiding Officer of the Senate
s/ Donna McDowell White
Presiding Officer of the House of Representatives
s/ Roy Cooper
Governor
Approved 10:38 a.m. this 20th day of September, 2021