House Bill 320 Third Edition, Modernize Remote Business Access, North Carolina (2021)
Summary
House Bill 320, Third Edition, in the General Assembly of North Carolina, Session 2021, with the short title Modernize Remote Business Access and the legends Committee Substitute Favorable 3/23/21 and Committee Substitute #2 Favorable 3/24/21. Its title says the act modifies authorization to conduct meetings by means of remote communication for certain entities and authorizes nonprofit corporations to conduct all business electronically unless prohibited in their articles of incorporation or bylaws. Part I concerns shareholder meetings conducted solely by means of remote communication, and Part III concerns meetings of a mutual insurance company. Part IV is a severability clause, and Part V states that the act is effective when it becomes law and applies to meetings noticed on or after that date.
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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
H 3
HOUSE BILL 320
Committee Substitute Favorable 3/23/21
Committee Substitute #2 Favorable 3/24/21
Short Title: Modernize Remote Business Access. (Public)
Sponsors:
Referred to:
March 18, 2021
1 A BILL TO BE ENTITLED
2 AN ACT TO MODIFY AUTHORIZATION TO CONDUCT MEETINGS BY MEANS OF
3 REMOTE COMMUNICATION FOR CERTAIN ENTITIES, TO AUTHORIZE
4 NONPROFIT CORPORATIONS TO CONDUCT ALL BUSINESS ELECTRONICALLY
5 UNLESS PROHIBITED IN THEIR ARTICLES OF INCORPORATION OR BYLAWS,
6 AND TO MAKE TECHNICAL CHANGES IN THE SURROUNDING LANGUAGE.
7 The General Assembly of North Carolina enacts:
8
9 PART I. AUTHORIZE SHAREHOLDER MEETINGS TO BE HELD SOLELY BY
10 MEANS OF REMOTE COMMUNICATION
11 SECTION 1.(a) G.S. 55-7-01 reads as rewritten:
12 "§ 55-7-01. Annual meeting.
13 (a) A corporation shall hold a meeting of shareholders annually at a time stated in or fixed
14 in accordance with the bylaws.
15 (b) Annual Unless the board of directors determines to hold the meeting solely by means
16 of remote communication in accordance with G.S. 55-7-09(c), annual shareholders' meetings
17 may be held (i) in or out of this State at the place stated in or fixed in accordance with the bylaws.
18 If bylaws, or (ii) if no place is stated in or fixed in accordance with the bylaws, annual meetings
19 shall be held at the corporation's principal office.
20 …."
21 SECTION 1.(b) G.S. 55-7-02 reads as rewritten:
22 "§ 55-7-02. Special meeting.
23 (a) A corporation shall hold a special meeting of shareholders:shareholders if either of
24 the following applies:
25 (1) On call of its board of directors or the person or persons authorized to do so
26 by the articles of incorporation or the bylaws; orbylaws.
27 …
28 (c) Special Unless the board of directors determines to hold the meeting solely by means
29 of remote communication in accordance with G.S. 55-7-09(c), special shareholders' meetings
30 may be held (i) in or out of this State at the place stated in or fixed in accordance with the bylaws.
31 If bylaws or (ii) if no place is stated or fixed in accordance with the bylaws, special meetings
32 shall be held at the corporation's principal office.
33 …."
34 SECTION 1.(c) G.S. 55-7-05 reads as rewritten:
35 "§ 55-7-05. Notice of meeting.
*H320-v-3*
General Assembly Of North Carolina Session 2021
1 (a) A corporation shall notify shareholders of the date, time, and place place, if any, of
2 each annual and special shareholders' meeting no fewer than 10 nor more than 60 days before the
3 meeting date. If the board of directors has authorized participation by means of remote
4 communication pursuant to G.S. 55-7-09 for any class or series of shareholders, the notice to
5 such class or series of shareholders shall describe the means of remote communication to be used.
6 Unless this Chapter or the articles of incorporation require otherwise, the corporation is required
7 to give notice only to shareholders entitled to vote at the meeting.
8 …
9 (e) Unless the bylaws require otherwise, if an annual or special shareholders' meeting is
10 adjourned to a different date, time, or place, if any, notice need not be given of the new date,
11 time, or place place, if any, if the new date, time, or place is following are announced at the
12 meeting before adjournment.adjournment:
13 (1) The new date, time, or place, if any.
14 (2) If the meeting is to be continued solely by means of remote communication,
15 a description of the means of remote communication.
16 If a new record date for the adjourned meeting is or must be fixed under G.S. 55-7-07,
17 however, notice of the adjourned meeting must be given under this section to persons who are
18 shareholders as of the new record date.
19 (f) After a public corporation has notified shareholders of the date, time, and place of an
20 annual or special shareholders' meeting in accordance with subsection (a) of this section, further
21 notification in accordance with subsection (a) of this section is not required if all of the following
22 apply:
23 (1) A governmental order restricting travel or group gatherings applicable to the
24 place of the shareholders' meeting or public corporation's principal office is in
25 effect and is anticipated in good faith by the board of directors to be in effect
26 at the date and time set forth in the initial notification, including by an
27 anticipated extension of an existing order.
28 (2) The public corporation's board of directors determines that the shareholders'
29 meeting is instead to be held solely by means of remote communication in
30 accordance with G.S. 55-7-09(c) at the same date and time set forth in the
31 initial notification or at a different date and time.
32 (3) The public corporation (i) promptly issues a press release for national
33 dissemination announcing the determination of its board of directors that the
34 shareholders' meeting is to be held solely by means of remote communication
35 and describing the means of remote communication to be used and providing
36 the date and time of the shareholders' meeting to be held solely by means of
37 remote communication and (ii) files the press release with the Securities and
38 Exchange Commission as close to the time the press release is issued as
39 practicable and approximately contemporaneously posts such press release to
40 its corporate website."
41 SECTION 1.(d) G.S. 55-7-09 reads as rewritten:
42 "§ 55-7-09. Remote participation in meetings.meetings; meetings held solely by remote
43 participation.
44 (a) To the extent authorized by a corporation's board of directors, shareholders of any
45 class or series designated by the board of directors may participate in any meeting of shareholders
46 by means of remote communication. Participation by means of remote communication shall be
47 subject to such guidelines and procedures as the board of directors adopts and shall be in
48 conformity with subsection (b) of this section.
49 (b) Shareholders participating in a shareholders' meeting by means of remote
50 communication shall be are deemed present and may vote at such a the meeting if the corporation
51 has implemented reasonable measures to do all of the following:
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1 (1) Verify that each person participating remotely is a shareholder.
2 (2) Provide each shareholder participating remotely a reasonable opportunity to
3 participate in the meeting and to vote on matters submitted to the shareholders,
4 including an opportunity to communicate and read or hear the proceedings of
5 the meeting, substantially concurrently with such proceedings.
6 (c) Unless shareholders' meetings held solely by means of remote communication are
7 prohibited by the articles of incorporation or the bylaws, the board of directors may, in its sole
8 discretion, determine that any meeting of shareholders shall not be held at any place and shall
9 instead be held solely by means of remote communication, but only if the corporation implements
10 the measures specified in subsection (b) of this section."
11 SECTION 1.(e) G.S. 55-7-20 reads as rewritten:
12 "§ 55-7-20. Shareholders' list for meeting.
13 (a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical
14 list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. The
15 list must shall be arranged by voting group (and within each voting group group, by class or
16 series of shares) shares within each voting group, and shall show the address of and number of
17 shares held by each shareholder.
18 (b) The shareholders' list must shall be available for inspection by any shareholder,
19 beginning two business days after notice of the meeting is given for which the list was prepared
20 and continuing through the meeting, (i) at the corporation's principal office or at a place identified
21 in the meeting notice in the city where the meeting will be held. held or (ii) on a reasonably
22 accessible electronic network, provided that the information required to gain access to the list is
23 provided with the notice of the meeting. In the event that the corporation determines to make the
24 list available on an electronic network, the corporation may take reasonable steps to ensure that
25 the information is available only to shareholders of the corporation. A shareholder, personally or
26 by or with his the shareholder's representative, is entitled on written demand to inspect and,
27 subject to the requirements of G.S. 55-16-02(c), to copy the list, during regular business hours
28 and at his the shareholder's expense, during the period it is available for inspection.
29 (c) The If the meeting is to be held at a place, the corporation shall make the shareholders'
30 list available at the meeting, and any shareholder, personally or by or with his the shareholder's
31 representative, is entitled to inspect the list at any time during the meeting or any adjournment.
32 The If the meeting is to be held at a place, the corporation is not required to make the list available
33 through electronic or other means of remote communication to a shareholder or proxy attending
34 the meeting by remote communication pursuant to G.S. 55-7-09. If the meeting is to be held
35 solely by means of remote communication, then the list shall also be open to inspection during
36 the meeting on a reasonably accessible electronic network, and the information required to access
37 the list shall be provided with the notice of the meeting.
38 (d) If the corporation refuses to allow a shareholder or his the shareholder's representative
39 to inspect the shareholders' list before or at the meeting (or meeting, or copy the list as permitted
40 by subsection (b)), (b), the superior court of the county where a corporation's principal office (or,
41 if none in this State, its registered office) is located, or, if the corporation has no principal office
42 in this State, the superior court of the county where the corporation's registered office is located,
43 on application of the shareholder, after notice is given to the corporation, may summarily order
44 the inspection or copying at the corporation's expense and may postpone the meeting for which
45 the list was prepared until the inspection or copying is complete.
46 (e) Refusal or failure to prepare or make available the shareholders' list does not affect
47 the validity of action taken at the meeting."
48 SECTION 1.(f) G.S. 55-10-22 reads as rewritten:
49 "§ 55-10-22. Bylaw increasing quorum or voting requirement for directors.directors or
50 prohibiting a meeting of shareholders solely by remote participation.
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1 (a) A bylaw that fixes a greater quorum or voting requirement for the board of directors
2 or that prohibits a meeting of shareholders solely by means of remote communication may be
3 amended or repealed:repealed as follows:
4 (1) If originally adopted by the shareholders, only by the shareholders, unless
5 amendment or repeal by the board of directors is permitted pursuant to
6 subsection (b);(b) of this section.
7 (2) If originally adopted by the board of directors, either by the shareholders or
8 by the board of directors.
9 (b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting
10 requirement for the board of directors may provide that it may be amended or repealed only by a
11 specified vote of either the shareholders or the board of directors.
12 (c) A The following applies to a bylaw referred to in subsection (a):(a) of this section.
13 (1) May It shall not be adopted by the board of directors by a vote less than a
14 majority of the directors then in office, andoffice.
15 (2) May It shall not itself be amended by a quorum or vote of the directors less
16 than the quorum or vote therein prescribed or prescribed by the shareholders
17 pursuant to subsection (b).(b) of this section."
18 SECTION 1.(g) The Revisor of Statutes shall cause to be printed, as annotations to
19 the published General Statutes, all relevant portions of the Official Comments to the Revised
20 Model Business Corporation Act and all explanatory comments of the drafters of this section as
21 the Revisor may deem appropriate.
22
23 PART II. AUTHORIZE NONPROFIT MEMBER MEETINGS TO BE HELD BY MEANS
24 OF REMOTE COMMUNICATION; AUTHORIZE NONPROFITS TO CONDUCT ALL
25 BUSINESS ELECTRONICALLY UNLESS PROHIBITED BY THE NONPROFIT
26 SECTION 2.(a) G.S. 55A-1-41 reads as rewritten:
27 "§ 55A-1-41. Notice.
28 …
29 (c) Written notice by a domestic or foreign corporation to its member is effective when
30 deposited in the United States mail with postage thereon prepaid and correctly addressed to the
31 member's address shown in the corporation's current record of members. To the extent the
32 corporation pursuant to G.S. 55A-1-70 and the member have agreed, notice Notice by a domestic
33 corporation to its member in the form of an electronic record sent by electronic means to a
34 member who has designated an email address as provided in G.S. 55A-1-70(b) is effective when
35 it is sent as provided in G.S. 66-325. A member may terminate any such agreement at any time
36 on a prospective basis effective upon written notice of termination to the corporation or upon
37 such later date as may be specified in the notice.
38 (d) Written notice to a domestic or foreign corporation (authorized authorized to conduct
39 affairs in this State) State may be addressed to its registered agent at its registered office or to the
40 corporation or its secretary at its principal office shown in its articles of incorporation, the
41 Designation of Principal Office Address form, or any Corporation's Statement of Change of
42 Principal Office Address form filed with the Secretary of State.
43 (e) Except as provided in subsection (c) of this section, written notice is effective at the
44 earliest of the following:
45 (1) When received;received.
46 (2) Five days after its deposit in the United States mail, as evidenced by the
47 postmark or otherwise, if mailed with at least first-class postage thereon
48 prepaid and correctly addressed;addressed.
49 (3) On the date shown on the return receipt, if sent by registered or certified mail,
50 return receipt requested, and the receipt is signed by or on behalf of the
51 addressee;addressee.
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1 (4) If mailed with less than first-class postage, 30 days after its deposit in the
2 United States mail, as evidenced by the postmark or otherwise, if mailed with
3 postage thereon prepaid and correctly addressed;addressed.
4 (5) When delivered to the member's address shown in the corporation's current
5 list of members.
6 In the case of notice in the form of an electronic record sent by electronic means, the time of
7 receipt shall be determined as provided in G.S. 66-325.
8 (f) Written notice is correctly addressed to a member of a domestic or foreign corporation
9 if addressed to the member's address shown in the corporation's current list of members. In the
10 case of members who are residents of the same household and who have the same address, the
11 corporation's bylaws may provide that a single notice may be given to such the members jointly.
12 …."
13 SECTION 2.(b) G.S. 55A-1-70 reads as rewritten:
14 "§ 55A-1-70. Electronic transactions.Conducting business electronically.
15 For purposes of applying Article 40 of Chapter 66 of the General Statutes to transactions
16 under this Chapter, a corporation may agree to conduct a transaction by electronic means through
17 provision in its articles of incorporation or bylaws or by action of its board of directors.
18 (a) Unless prohibited or limited by the articles of incorporation or bylaws, or by action
19 of its board of directors and subject to the requirements in subsection (b) of this section, a
20 corporation, its officers, directors, and members may conduct business by electronic means in
21 accordance with this Chapter. To the extent that this Chapter conflicts with Article 40 of Chapter
22 66 of the General Statutes, this Chapter prevails.
23 (b) Members who wish to communicate and conduct business with a corporation by
24 electronic means, including, without limitation, as permitted in G.S. 55A-1-41, 55A-7-04,
25 55A-7-08, and 55A-7-24, shall first designate the email address to be used for communication
26 and business between the member and the corporation and shall provide any other information
27 required by the corporation to facilitate communication and business conducted between the
28 member and the corporation. The corporation shall inform the members on how to designate an
29 email address, of any additional information the corporation requires and how to provide it, and
30 on how to update an email address and other required information previously provided."
31 SECTION 2.(c) G.S. 55A-2-07 reads as rewritten:
32 "§ 55A-2-07. Emergency bylaws.
33 (a) Unless the articles of incorporation provide otherwise, the board of directors of a
34 corporation may adopt, amend, or repeal bylaws to be effective only in an emergency defined in
35 subsection (d) of this section. The emergency bylaws, which are subject to amendment or repeal
36 by the members, may make all provisions necessary for managing the corporation during the
37 emergency, including:
38 (1) Procedures for calling a meeting of the board of directors;
39 (2) Quorum requirements for the meeting; and
40 (3) Designation of additional or substitute directors.
41 (b) All provisions of the regular bylaws consistent with the emergency bylaws remain
42 effective during the emergency. The emergency bylaws are not effective after the emergency
43 ends.
44 (c) Corporate action taken in good faith in accordance with the emergency bylaws binds
45 the corporation, and the fact that the action was taken pursuant to emergency bylaws shall not be
46 used to impose liability on a corporate director, officer, employee, or agent.
47 (d) An emergency exists for purposes of this section if a quorum of the corporation's
48 directors cannot readily be assembled because of some catastrophic event.if a natural or
49 man-made disaster impedes the ability of the corporation's board of directors or members to
50 comply with one or more provisions of the corporation's bylaws."
51 SECTION 2.(d) G.S. 55A-7-01 reads as rewritten:
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1 "§ 55A-7-01. Annual and regular meetings.
2 (a) A corporation having members with the right to vote for directors shall hold a meeting
3 of such the members annually.
4 (b) A corporation with members may hold regular membership meetings at the times
5 stated in or fixed in accordance with the bylaws.
6 (c) Annual and regular membership meetings may be held (i) in person in or out of this
7 State at the place stated in or fixed in accordance with the bylaws. bylaws or (ii) by means of
8 remote communication, as provided in G.S. 55A-7-09. If no place is stated in or fixed in
9 accordance with the bylaws, in-person annual and regular meetings shall be held at the
10 corporation's principal office.
11 …."
12 SECTION 2.(e) G.S. 55A-7-02 reads as rewritten:
13 "§ 55A-7-02. Special meeting.
14 (a) A corporation with members shall hold a special meeting of members:members in
15 any of the following circumstances:
16 (1) On call of its board of directors or the person or persons authorized to do so
17 by the articles of incorporation or bylaws; orbylaws.
18 (2) Within 30 days after the holders of at least ten percent (10%) of all the votes
19 entitled to be cast on any issue proposed to be considered at the proposed
20 special meeting sign, date, and deliver to the corporation's secretary one or
21 more written demands for the meeting describing the purpose or purposes for
22 which it is to be held.
23 (b) If not otherwise fixed under G.S. 55A-7-03 or G.S. 55A-7-07, the record date for
24 determining members entitled to demand a special meeting is the date the first member signs the
25 demand.
26 (c) Special meetings of members may be held (i) in person in or out of this State at the
27 place stated in or fixed in accordance with the bylaws. bylaws or (ii) by means of remote
28 communication as provided in G.S. 55A-7-09. If no place is stated or fixed in accordance with
29 the bylaws, in-person special meetings shall be held at the corporation's principal office.
30 (d) Only those matters that are within the purpose or purposes described in the meeting
31 notice required by G.S. 55A-7-05 may be acted upon at a special meeting of members."
32 SECTION 2.(f) G.S. 55A-7-03 reads as rewritten:
33 "§ 55A-7-03. Court-ordered meeting.
34 (a) The superior court of the county where a corporation's principal office, or, if there is
35 none in this State, its registered office, is located may, after notice is given to the corporation and
36 upon such further notice and opportunity to be heard, if any, as the court may deem appropriate
37 under the circumstances, summarily order a meeting to be held:held in any of the following
38 circumstances:
39 (1) On application of any member if an annual meeting was not held within 15
40 months after the corporation's last annual meeting; ormeeting.
41 (2) On application of a member who signed a demand for a special meeting valid
42 under G.S. 55A-7-02, if the corporation has not held the meeting as required
43 by that section.
44 (b) The court may fix the time and place of the meeting, specify a record date for
45 determining those persons entitled to notice of and to vote at the meeting, prescribe the form and
46 content of the meeting notice, fix the quorum required for specific matters to be considered at the
47 meeting (or or direct that the votes represented at the meeting constitute a quorum for action on
48 those matters), matters, and enter other orders necessary to accomplish the purpose or purposes
49 of the meeting. The court may order that the meeting be held by means of remote communication
50 as provided in G.S. 55A-7-09.
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1 (c) If the court orders a meeting, it may also order the corporation to pay all or part of the
2 member's costs (including costs, including reasonable attorneys' fees) fees, incurred to obtain the
3 order."
4 SECTION 2.(g) G.S. 55A-7-04 reads as rewritten:
5 "§ 55A-7-04. Action by written consent.
6 (a) Action required or permitted by this Chapter to be taken at a meeting of members may
7 be taken without a meeting if the action is taken by all members entitled to vote on the action.
8 The action shall be evidenced by one or more written consents describing the action taken, signed
9 before or after such the action by all members entitled to vote thereon, on the action, and delivered
10 to the corporation for inclusion in the minutes or filing with the corporate records. To the extent
11 the corporation has agreed pursuant to If a member has agreed as provided in G.S. 55A-1-70, a
12 the member's consent to action taken without a meeting may be in electronic form and delivered
13 by electronic means.
14 …."
15 SECTION 2.(h) G.S. 55A-7-05 reads as rewritten:
16 "§ 55A-7-05. Notice of meeting.
17 …
18 (c) Notice is fair and reasonable if:if it conforms to all of the following:
19 (1) The corporation gives notice to all members entitled to vote at the meeting of
20 the place, place, if any, date, and time of each annual, regular, and special
21 meeting of members no fewer than 10, or, if notice is mailed by other than
22 first class, registered or certified mail, no fewer than 30, nor more than 60 days
23 before the meeting date;date.
24 (1a) If the meeting will be held by means of remote communication, the notice
25 shall include all the information required by G.S. 55A-7-09.
26 (2) Notice of an annual or regular meeting includes a description of any matter or
27 matters that shall be approved by the members under G.S. 55A-8-31,
28 55A-8-55, 55A-10-03, 55A-10-21, 55A-11-04, 55A-12-02, or 55A-14-02;
29 and55A-14-02.
30 (3) Notice of special meeting includes a description of the matter or matters for
31 which the meeting is called.
32 (d) Unless the bylaws require otherwise, if an annual, regular, or special meeting of
33 members is adjourned to a different date, time, or place, notice need not be given of the new date,
34 time, or place, if the new date, time, or place is announced at the meeting before adjournment. If
35 the meeting is to be continued by means of remote communication, the announcement shall also
36 include a description of the means of remote communication. If a new record date for the
37 adjourned meeting is or must be fixed under G.S. 55A-7-07, however, notice of the adjourned
38 meeting shall be given under this section to the members of record entitled to vote at the meeting
39 as of the new record date.
40 (e) When giving notice of an annual, regular, or special meeting of members, a
41 corporation shall give notice of a matter a member intends to raise at the meeting if:if all of the
42 following apply:
43 (1) Requested The corporation is requested in writing to do so by a person or
44 persons entitled to call a special meeting pursuant to G.S. 55A-7-02;
45 andG.S. 55A-7-02.
46 (2) The request is received by the secretary or president of the corporation at least
47 10 days before the corporation gives notice of the meeting."
48 SECTION 2.(i) G.S. 55A-7-06 reads as rewritten:
49 "§ 55A-7-06. Waiver of notice.
50 …
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1 (b) A member's attendance at a meeting:meeting in person or by means of remote
2 communication waives objection to all of the following:
3 (1) Waives objection to lack Lack of notice or defective notice of the meeting,
4 unless the member at the beginning of the meeting objects to holding the
5 meeting or conducting business at the meeting; andmeeting.
6 (2) Waives objection to consideration Consideration of a particular matter at the
7 meeting that is not within the purpose or purposes described in the meeting
8 notice, unless the member objects to considering the matter before it is voted
9 upon.upon in an in-person meeting."
10 SECTION 2.(j) G.S. 55A-7-08 reads as rewritten:
11 "§ 55A-7-08. Action Member action by written ballot.ballot or electronic voting without a
12 meeting.
13 (a) Unless prohibited or limited by the articles of incorporation or bylaws and without
14 regard to the requirements of G.S. 55A-7-04, any action that may be taken at any annual, regular,
15 or special meeting of members may be taken without a meeting if the corporation delivers a
16 written ballot to every member entitled to vote on the matter. Any requirement that any vote of
17 the members be made by written ballot may be satisfied by a ballot submitted by electronic
18 transmission, including electronic mail, provided that such electronic transmission shall either
19 set forth or be submitted with information from which it can be determined that the electronic
20 transmission was authorized by the member or the member's proxy.by written ballots or
21 electronic voting as follows:
22 (1) Written ballots. – The corporation may deliver a written ballot to members
23 entitled to vote on the matter that sets forth each proposed action and provides
24 an opportunity to vote for or against each proposed action. Unless secret
25 balloting is required on the proposed action, the ballot shall contain or request
26 information sufficient to identify the member or the member's proxy
27 submitting the ballot. Written ballots may be submitted to the corporation by
28 any reasonable means specified by the corporation, including email.
29 (2) Electronic voting. – For members who have complied with G.S. 55A-1-70,
30 the corporation may provide an electronic ballot or electronic notice that sets
31 forth each proposed action and provides an opportunity and instructions on
32 how to vote for or against each proposed action using the electronic ballot or
33 an electronic voting system.
34 (b) A written ballot shall:
35 (1) Set forth each proposed action; and
36 (2) Provide an opportunity to vote for or against each proposed action.
37 (c)(b) All members entitled to vote on the matter shall be given the opportunity to vote on
38 the proposed action by written ballot or electronic voting, or both. The board of directors may
39 determine, in its discretion, whether votes shall be cast by written ballots or by electronic voting,
40 or by both, provided that votes may be cast solely by electronic voting only if all members entitled
41 to vote on the proposed action have complied with G.S. 55A-1-70(b). Approval by written ballot
42 or electronic voting, or both, pursuant to this section shall be valid only when the number of votes
43 cast by written ballot or electronic voting, or both, equals or exceeds the quorum required to be
44 present at a meeting authorizing the action, and the number of approvals equals or exceeds the
45 number of votes that would be required to approve the matter at a meeting at which the same
46 total number of votes were cast.
47 (d)(c) All written ballots or solicitations for votes by written ballot ballot, all electronic
48 ballots or solicitations for votes by electronic ballot, and all electronic voting notices shall
49 indicate the time by which a written or electronic ballot shall be received by the corporation or
50 by which electronic votes shall be cast in order to be counted. The deadline for the return of
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1 written ballots and electronic ballots and for the casting of electronic votes on any proposed
2 action shall be identical.
3 (e)(d) Except as otherwise provided in the articles of incorporation or bylaws, a written
4 ballot any written ballot, electronic ballot, or electronic vote that is submitted shall not be
5 revoked."
6 SECTION 2.(k) Article 7 of Chapter 55 of the General Statutes is amended by
7 adding a new section to read:
8 "§ 55A-7-09. Meetings held by means of remote communication.
9 (a) Unless members' meetings held by means of remote communication are prohibited
10 by the articles of incorporation or the bylaws, the board of directors may, in its sole discretion,
11 determine that any membership meeting shall be held by means of remote communication, but
12 only if the remote communication allows members participating to hear other participants and to
13 be heard by other participants if recognized during the meeting, if members are given the
14 opportunity to participate to the same extent they could participate if present in person (including
15 to vote if votes are to be taken during the meeting), and if the corporation has implemented
16 reasonable measures to verify that each person participating remotely is a member or a member's
17 proxy.
18 (b) In addition to the information required by G.S. 55A-7-05, notice of a meeting held by
19 means of remote communication shall include notice that the meeting will be held by means of
20 remote communication and sufficient instruction and information on how members may join the
21 meeting remotely.
22 (c) The board of directors may prescribe additional rules and procedures for meetings
23 held by means of remote communication, that are consistent with the provisions of this Chapter,
24 including, without limitation, rules concerning votes to be taken during the remote
25 communication meeting or that membership votes on some or all matters shall be cast as
26 permitted in G.S. 55A-7-08."
27 SECTION 2.(l) G.S. 55A-7-24 reads as rewritten:
28 "§ 55A-7-24. Proxies.
29 (a) Unless the articles of incorporation or bylaws prohibit or limit proxy voting, a
30 member may vote in person or by proxy. A member may appoint one or more proxies to vote or
31 otherwise act for the member by signing an appointment form, either personally or by the
32 member's attorney-in-fact. Without limiting G.S. 55A-1-70, an An appointment in the form of an
33 electronic record submitted by a member who has agreed as provided in G.S. 55A-1-70 that either
34 bears the member's electronic signature or is sent from the member's designated email address
35 and that may be directly reproduced in paper form by an automated process shall be deemed a
36 valid appointment form within the meaning of this section. In addition, if and to the extent
37 permitted by the nonprofit corporation, a member may appoint one or more proxies by any kind
38 of telephonic transmission, even if not accompanied by written communication, under
39 circumstances or together with information from which the nonprofit corporation can reasonably
40 assume that the appointment was made or authorized by the member.
41 …
42 (c) An appointment of a proxy is revocable by the member unless the appointment form
43 conspicuously states that it is irrevocable and the appointment is coupled with an interest. An
44 appointment made irrevocable under this subsection shall be revocable when the interest with
45 which it is coupled is extinguished. A transferee for value of an interest subject to an irrevocable
46 appointment may revoke the appointment if he the transferee did not have actual knowledge of
47 its irrevocability.
48 …
49 (e) A revocable appointment of a proxy is revoked by the person appointing the
50 proxy:proxy doing any of the following:
51 (1) Attending any meeting and voting in person; orperson.
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General Assembly Of North Carolina Session 2021
1 (2) Signing and delivering to the secretary or other officer or agent authorized to
2 tabulate proxy votes either a writing stating that the appointment of the proxy
3 is revoked or a subsequent appointment form.
4 …."
5 SECTION 2.(m) G.S. 55A-7-20 reads as rewritten:
6 "§ 55A-7-20. Members' list for meeting.
7 …
8 (b) Beginning two business days after notice is given of the meeting for which the list
9 was prepared and continuing through the meeting, the list of members shall be available for
10 inspection by any member for the purpose of communication with other members concerning the
11 meeting. The list shall be available at (i) the corporation's principal office or at a reasonable place
12 identified in the meeting notice in the city where the meeting will be held for inspection by any
13 member for the purpose of communication with other members concerning the meeting. or (ii)
14 on a reasonably accessible electronic network, so long as the information required to gain access
15 to the list is provided with the notice of the meeting. In the event that the corporation determines
16 to make the list available on an electronic network, the corporation may take reasonable steps to
17 ensure that the information is available only to members of the corporation. A member,
18 personally or by or with his the member's representatives, is entitled on written demand to inspect
19 and, subject to the limitations of G.S. 55A-16-02(c) and G.S. 55A-16-05 and at his the member's
20 expense, to copy the list at a reasonable time during the period it is available for inspection.
21 (c) The If the meeting is to be held at a place, the corporation shall make the list of
22 members available at the meeting, and any member, personally or by or with his the member's
23 representatives, is entitled to inspect the list at any time during the meeting or any adjournment.
24 (d) If the corporation refuses to allow a member or his the member's representative to
25 inspect or copy the list of members as permitted in subsections (b) and (c) of this section, the
26 superior court of the county where a corporation's principal office (or, office, or, if there is none
27 in this State, its registered office) office, is located, on application of the member, after notice is
28 given to the corporation and upon such further evidence, notice and opportunity to be heard, if
29 any, as the court may deem appropriate under the circumstances, may summarily order the
30 inspection or copying at the corporation's expense. The court may postpone the meeting for which
31 the list was prepared until the inspection or copying is complete and may order the corporation
32 to pay the member's costs, including reasonable attorneys' fees, incurred to obtain the order.
33 (e) Refusal or failure to prepare or make available the members' list does not affect the
34 validity of action taken at the meeting."
35 SECTION 2.(n) G.S. 55A-8-20 reads as rewritten:
36 "§ 55A-8-20. Regular and special meetings.
37 (a) The board of directors may hold regular or special meetings in or out of this State.
38 (b) Unless the articles of incorporation or bylaws provide otherwise, the board of
39 directors may permit any or all directors to participate in a regular or special meeting by, or
40 conduct the meeting through the use of, any means of communication by which all directors
41 participating may simultaneously hear and be heard by each other during the meeting. A director
42 participating in a meeting by this means is deemed to be present in person at the meeting."
43 SECTION 2.(o) G.S. 55A-8-21 reads as rewritten:
44 "§ 55A-8-21. Action without meeting.
45 (a) Unless the articles of incorporation or bylaws provide otherwise, action required or
46 permitted by this Chapter to be taken at a board of directors' meeting may be taken without a
47 meeting if the action is taken by all members of the board. The action shall be evidenced by one
48 or more written consents signed by each director before or after such the action, describing the
49 action taken, and included in the minutes or filed with the corporate records reflecting the action
50 taken. To the extent the corporation has agreed pursuant to G.S. 55A-1-70, As authorized in
Page 10 House Bill 320-Third Edition
General Assembly Of North Carolina Session 2021
1 G.S. 55A-1-70, a director's consent to action taken without meeting may be in electronic form
2 and delivered by electronic means.
3 …."
4
5 PART III. AUTHORIZE INSURANCE POLICYHOLDER MEETINGS TO BE HELD
6 REMOTELY
7 SECTION 3. G.S. 58-8-10 reads as rewritten:
8 "§ 58-8-10. Policyholders are members of mutual companies.
9 (a) Every person insured by a mutual insurance company is a member while that person's
10 policy is in force, entitled to one vote for each policy that person holds, and must shall be notified
11 of the (i) time and (ii) place of or method of remote communication, or both, for holding the
12 company's meetings by a written notice or by an imprint upon the back of each policy, receipt,
13 or certificate of renewal, as follows:
14 (1) If the meetings are to be held at a place, as follows: The insured is hereby
15 notified that by virtue of this policy the insured is a member of the ______
16 insurance company, and that the annual meetings of the company are held at
17 its home office on the ______ day of ______, in each year, at ______ o'clock.
18 (2) If the meetings are to be held solely by remote communication, as follows:
19 The insured is hereby notified that by virtue of this policy the insured is a
20 member of the ______ insurance company, and that the annual meetings of
21 the company are held by means of remote communication, which can be
22 accessed by ______ on the ______ day of ______, in each year, at ______
23 o'clock.
24 (3) If the meetings are to be held at a place and by remote communication, as
25 follows: The insured is hereby notified that by virtue of this policy the insured
26 is a member of the ______ insurance company, and that the annual meetings
27 of the company are held at its home office and by means of remote
28 communication, which can be accessed by ______ on the ______ day of
29 ______, in each year, at ______ o'clock.
30 (b) The blanks in subsection (a) of this section shall be duly filled in print and are a
31 sufficient notice. A corporation that becomes a member of a mutual insurance company may
32 authorize any person to represent the corporation; and this representative has all the rights of an
33 individual member. A person holding property in trust may insure it in a mutual insurance
34 company, and as trustee assume the liability and be entitled to the rights of a member; but is not
35 personally liable upon the contract of insurance. Members may vote by proxies, dated and
36 executed within one year after receipt, and returned and recorded on the books of the company
37 three days or more before the meeting at which they are to be used.
38 (c) Participation by means of remote communication shall be subject to such guidelines
39 and procedures as the board of directors adopts and shall be in conformity with subsection (d) of
40 this section.
41 (d) Members participating in meetings by means of remote communication shall be
42 deemed (i) present and (ii) voting in person at the meeting if the mutual insurance company has
43 implemented reasonable measures to do all of the following:
44 (1) Verify that each person participating remotely is a member.
45 (2) Provide each member participating remotely a reasonable opportunity to
46 participate in the meeting and to vote on matters submitted to the members,
47 including an opportunity to communicate and read or hear the proceedings of
48 the meeting, substantially concurrently with the proceedings.
49 (e) The board of directors may, in its sole discretion, determine that any meeting of
50 members shall not be held at any place and shall instead be held solely by means of remote
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General Assembly Of North Carolina Session 2021
1 communication, but only if the mutual insurance company implements the measures specified in
2 subsection (d) of this section."
3
4 PART IV. SEVERABILITY CLAUSE
5 SECTION 4. If any section or provision of this act is declared unconstitutional or
6 invalid by the courts, it does not affect the validity of this act as a whole or any part other than
7 the part so declared to be unconstitutional or invalid.
8
9 PART V. EFFECTIVE DATE AND APPLICABILITY
10 SECTION 5. This act is effective when it becomes law and applies to meetings
11 noticed on or after that date. Remote shareholder meetings noticed before the effective date of
12 this act as a result of the State of Emergency declared by Executive Order No. 116 on March 10,
13 2020, and complying with any subsequent executive orders authorizing remote shareholder
14 meetings issued by Governor Roy A. Cooper shall be deemed in compliance with this act.
Page 12 House Bill 320-Third Edition
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