2019 -- H 5683

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LC000937

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO CORPORATIONS-ELECTRONIC NETWORKS AND DATABASES

     Introduced By: Representatives Place, Nardone, Roberts, Filippi, and Chippendale

     Date Introduced: February 27, 2019

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 7-1.2-106, 7-1.2-602, 7-1.2-608, 7-1.2-702, 7-1.2-708 and 7-1.2-

709 of the General Laws in Chapter 7-1.2 entitled "Rhode Island Business Corporation Act" are

hereby amended to read as follows:

     7-1.2-106. Definitions.

     As used in this chapter:

     (1) "Articles of incorporation" means the original or restated articles of incorporation and

all of their amendments including agreements of merger.

     (2) "Authorized shares" means the shares of all classes which the corporation is

authorized to issue.

     (3) "Corporation" or "domestic corporation" means a corporation for profit subject to the

provisions of this chapter, except a foreign corporation.

     (4) "Data address" means the string of alphanumeric characters on one or more

distributed or other electronic networks or databases that may only be accessed by knowledge or

possession of a private key in order to facilitate or record transactions on the distributed or other

electronic network or database;

     (4)(5) "Delivering/Delivered" means either physically transferring a paper document to

the secretary of state or transferring a document to the secretary of state by electronic

transmission through a medium provided and authorized by the secretary of state.

     (5)(6) "Electronic transmission" or "transmitted electronically" means any form of

communication, that does not directly involving involve the physical transmission of paper,

including a process of communication that uses one or more distributed or other electronic

networks or databases, and that creates a record that may be retained, retrieved, and reviewed by

a recipient thereof, and that may be directly reproduced in paper form by such a recipient through

an automated process.

     (6)(7) "Employee" includes officers but not directors. A director may accept duties which

also make him or her an employee.

     (7)(8) "Filing" means delivered to the secretary of state in either paper format or

electronic transmission through a medium provided and authorized by the secretary of state.

     (8)(9) "Foreign corporation" means a corporation for profit organized under laws other

than the laws of this state for a purpose or purposes for which a corporation may be organized

under this chapter.

     (10) "Identity" means the name of a shareholder or the data address for which the

shareholder has knowledge or possession of the private key uniquely associated with the data

address;

     (9)(11) "Individual" means a natural person.

     (10)(12) "Insolvent" means the inability of a corporation to pay its debts as they become

due in the usual course of its business.

     (13) "Network signature" means a string of alphanumeric characters that when

broadcasted by a shareholder to the data address's corresponding distributed or other electronic

network or database provides reasonable assurances to a corporation that the shareholder has

knowledge or possession of the private key uniquely associated with the data address;

     (11)(14) "Person" means an individual or an entity. An entity includes domestic and

foreign business corporation, domestic and foreign nonprofit corporation; estate; trust; domestic

and foreign unincorporated entity; and a state, the United States and a foreign government.

     (15) "Record of shareholders" means one or more records administered by or on behalf of

a corporation that records the identity of all the corporation's shareholders and the number and

class of shares held by each shareholder in accordance with § 7-1.2-602. "Record of

shareholders" includes a record of all issuances and transfers of shares of a corporation at the

discretion of the corporation;

     (12)(16) "Shareholder" means one who is a holder of record of shares in a corporation or

the owner of a private key that is uniquely associated with a data address that facilitates or

records the sending and receiving of shares.

     (13)(17) "Shares" means the units into which the proprietary interests in a corporation are

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divided.

     (14)(18) "Signature" or "Signed" or "Executed" means an original signature, facsimile, or

an electronically transmitted signature submitted through a medium provided and authorized by

the secretary of state.

     (15)(19) "State" means the state of Rhode Island and Providence Plantations.

     (16)(20) "Subscriber" means one who subscribes for shares in a corporation, whether

before or after incorporation.

     (17)(21) The singular shall be construed to include the plural, the plural the singular, and

the masculine the feminine, when consistent with the intent of this chapter.

     7-1.2-602. Authorized shares -- Shares in classes or series -- Issuance of shares.

     (a) Every corporation has the power to create and issue the number of shares stated in its

articles of incorporation or any amendment thereto.

     (b) Classes and series. As stated in the articles of incorporation or in any amendment

thereto, or in the resolution or resolutions providing for the issue of such shares adopted by the

board of directors pursuant to authority expressly vested in it by the provisions of its articles of

incorporation, a corporation may issue one or more classes of shares, including one or more

classes of common shares, or one or more series of shares within any class thereof, any or all of

which classes or series of shares may be certificated or uncertificated, with par value or without

par value, and which classes or series may have such voting powers, full or limited, or no voting

powers, and such designations, preferences and relative, participating, optional or other special

rights, and qualifications, limitations or restrictions thereof as are stated and expressed in the

articles of incorporation or any amendment thereto, or in the resolution or resolutions providing

for the issue of such shares adopted by the board of directors pursuant to the authority expressly

vested in it by the provisions of its articles of incorporation.

     (c) Without limiting the authority contained in these provisions, a corporation, when

provided for in its articles of incorporation, may issue shares of preferred or special classes or

series:

     (1) Redeemable for cash, property, promissory notes or rights, including securities of any

other corporation, at the option of either the holder or the corporation or upon the happening of a

specified event, at the time or times, at the price or prices, or the rate or rates, and with the

adjustments stated and expressed or provided for in the articles of incorporation or any

amendment thereto, or in the vote or votes providing for the issuance of the shares adopted by the

board of directors as previously provided; provided, however, that immediately following any

such redemption the corporation must have outstanding one or more shares of one or more classes

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or series, which share, or shares together, have unlimited voting rights.

     (2) Entitling the holders of the shares to cumulative, noncumulative, or partially

cumulative dividends.

     (3) Having preference over any other class or classes or series of shares as to the payment

of dividends.

     (4) Having preference in the assets of the corporation over any other class or classes or

series of shares upon the voluntary or involuntary liquidation of the corporation.

     (5) To the extent not inconsistent with this chapter, having limited or no voting rights, or

having special voting rights including the power to elect one or more directors.

     (6) Convertible into, or exchangeable for, at the option of either the holder or the

corporation or upon the happening of a specified event, shares of any other class or classes or any

other series of shares of the corporation, at such price or prices or at such rate or rates of

exchange and with such adjustments as are stated in the articles of incorporation or in the

resolution or resolutions providing for the issuance of such shares adopted by the board of

directors.

     (d) If the articles of incorporation expressly vest authority in the board of directors, then,

to the extent that the articles of incorporation have not established series and fixed and

determined the variations in the relative rights and preferences as between the series, the board of

directors has authority to divide any or all of the classes into series and, within the limitations, if

any, stated in the articles of incorporation, to fix and determine the relative rights and preferences

of the shares of any series established.

     (e)(1) Open-end investment company. Notwithstanding the provisions of subsections (a)

and (b) of this section, the board of directors of a corporation that is registered or intends to

register as an open-end investment company under the Investment Company Act of 1940, as

heretofore or hereafter amended, after the registration as an open-end investment company takes

effect, may increase or decrease the aggregate number of shares or the number of shares of any

class or series that the corporation has authority to issue unless a provision has been included in

the articles of incorporation of the corporation after July 1, 2001, prohibiting such an action by

the board of directors to increase or decrease the aggregate number of shares or the number of

shares of any class or series that the corporation has authority to issue.

     (2) Conditional license of franchise. Any shares of a corporation which holds (directly or

indirectly) a license or franchise from a governmental agency to conduct its business or is a

member of a national securities exchange, which license, franchise or membership is conditioned

upon some or all of the holders of its shares possessing prescribed qualifications may be made

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subject to redemption by the corporation to the extent necessary to prevent the loss of such

license, franchise or membership or to reinstate it.

     (f) Dividends. The holders of preferred or special shares of any class or of any series of

shares are entitled to receive dividends at the rates, on the conditions and at the times that are

stated and expressed in the articles of incorporation or in the vote or votes providing for the issue

of the shares adopted by the board of directors as previously provided, payable in preference to,

or in relation to, the dividends, payable on any other class or classes of shares, or of any other

series of shares, and cumulative, non-cumulative or partially cumulative as is stated and

expressed. When dividends upon the preferred and special shares, if any, to the extent of the

preferences to which the shares are entitled, have been paid or declared and set apart for payment,

a dividend on the remaining class or classes or series of shares may then be paid out of the

remaining assets of the corporation available for dividends.

     (g) Rights upon liquidation. The holders of the preferred or special shares of any class or

of any series of shares are entitled to the rights upon the dissolution of, or upon any distribution

of the assets or liquidation, voluntary or involuntary, of the corporation as are stated and

expressed in the articles of incorporation or in the vote or votes providing for the issue of the

shares adopted by the board of directors as previously provided.

     (h) Facts ascertainable outside the articles of incorporation. Any of the voting powers,

designations, preferences, rights and qualifications, limitations or restrictions of any class or

series of shares may be made dependent upon facts ascertainable outside the articles of

incorporation or outside the resolution or resolutions providing for the issue of such shares

adopted by the board of directors pursuant to authority expressly vested in it by its articles of

incorporation, provided that the manner in which such facts operate upon the voting powers,

designations, preferences, rights and qualifications, limitations or restrictions of such class or

series of shares is clearly and expressly set forth in the articles of incorporation or in the

resolution or resolutions providing for the issue of such shares adopted by the board of directors.

The term "facts", as used in this subsection, includes, but is not limited to, the occurrence of any

event, including a determination or action by any person, including the corporation.

     (i) Amendment of rights and restrictions by board of directors. Subject to subsection (j),

unless otherwise provided in the articles of incorporation, if no shares have been issued of a class

or series established by resolution of the board of directors, the voting powers, designations,

preferences, and relative, participating optional or other rights, if any or the qualifications,

limitations or restrictions thereof, may be amended by a resolution or resolutions adopted by the

board of directors.

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     (j)(1) Issuance. Before any corporation issues any shares of any class or of any series of

any class of which the voting powers, designations, preferences, and relative, participating,

optional, or other rights, if any, or the qualifications, limitations, or restrictions of the shares, if

any, have not been stated in the articles of incorporation but are provided for in a vote or votes

adopted by the board of directors pursuant to authority expressly vested in it by the provisions of

the articles of incorporation, a certificate presenting a copy of the vote or votes and the number of

shares of the class or series must be signed by an authorized officer of the corporation and filed in

accordance with § 7-1.2-105. Upon filing, the certificate constitutes an amendment to the articles

of incorporation.

     (2) Increase or decrease of shares. Unless otherwise provided in any vote or votes, the

number of shares of any class or series as stated in the vote or votes may be increased or

decreased (but not below the number of shares then outstanding) by a certificate likewise made,

signed, and filed presenting a statement that a specified increase or decrease in the number of

shares had been authorized and directed by a vote or votes likewise adopted by the board of

directors. If the number of shares is decreased, the number of shares specified in the certificate

resume the status which they had before the adoption of the prior resolution.

     (k) For purposes of this chapter, the following identified as a shareholder in a

corporation's current record of shareholders constitutes a shareholder:

     (1) Three (3) or fewer co-owners;

      (2) A corporation, partnership, trust, estate, or other entity;

     (3) The trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or

account; or

     (4) One data address.

      (l) For purposes of this chapter, shareholdings registered in substantially similar names

constitute one shareholder if it is reasonable to believe that the names represent the same person.

     7-1.2-608. Form and content of certificates.

     (a) The shares of a corporation may but need not be represented by certificates as

determined by the board of directors. Every holder of shares represented by certificates and upon

request every holder of uncertificated shares is entitled to have a certificate signed by the officer

or officers designated for the purpose by the bylaws of the corporation, and in the absence of any

designation, by the chairperson or the vice chairperson of the board of directors, or the president

or a vice president, and by the treasurer or the assistant treasurer, or the secretary or an assistant

secretary of the corporation, representing the number of shares registered in certificate form and

may be sealed with the seal of the corporation or a facsimile of the seal. Any or all of the

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signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar

who has signed or whose facsimile signature has been placed upon the certificate has ceased to be

the officer, transfer agent or registrar before the certificate is issued, it may be issued by the

corporation with the same effect as if he or she were the officer, transfer agent or registrar at the

date of its issue.

     (b) Every certificate representing shares issued by a corporation which is authorized to

issue shares of more than one class must state upon the face or back of the certificate, or state that

the corporation will furnish to any shareholder upon request and without charge, a full statement

of the designations, preferences, limitations and relative rights of the shares of each class

authorized to be issued and, if the corporation is authorized to issue any preferred or special class

in series, the variations in the relative rights and preferences between the shares of each series so

far as the series have been fixed and determined and the authority of the board of directors to fix

and determine the relative rights and preferences of subsequent series.

     (c) Each certificate representing shares must state upon the face of the certificate:

     (1) That the corporation is organized under the laws of this state.

     (2) The name identity of the person to whom issued.

     (3) The number and class of shares, and the designation of the series, if any, which the

certificate represents.

     (4) The par value of each of the shares, if any.;

     (5) A record of shareholders administered by or on behalf of a corporation shall be kept

in a form that permits preparation of a list of the identities of all shareholders, in alphabetical or

numerical order by class of shares showing the number and class of shares held by each. The list

shall also show each shareholder's physical mailing address, if the identity of a shareholder on the

list consists of the shareholder's name, and each shareholder's authorized means of receipt for

electronic transmissions, if the identity of a shareholder on the list consists of the shareholder's

data address. A record of shareholders may show both the shareholder's name and data address.

     (6) Records administered by or on behalf of, or maintained by, a corporation may be kept

on, or by means of, or be in the form of any information storage device or method or any one or

more distributed or other electronic networks or databases provided that the records are kept in

written form or in another form capable of conversion into written form within a reasonable time.

     (d) No certificate may be issued for any share until the share is fully paid.

     (e) Within a reasonable time after the issuance or transfer of uncertificated shares, the

corporation shall send to the registered owner of the shares a written notice containing the

information and statements required to be presented or stated on certificates pursuant to

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subsections (b) and (c) and § 7-1.2-609(b).

     (f) Except as otherwise expressly provided by law, the rights and obligations of the

holders of uncertificated shares and the rights and obligations of the holders of certificates

representing shares of the same class and series are identical.

     7-1.2-702. Notice to shareholders.

     (a) Any notice to shareholders given by the corporation under any provision of this

chapter, the articles of incorporation or the bylaws is effective if given in writing, or by facsimile

or a form of electronic transmission consented to by the shareholder to whom the notice is given.

Any consent to alternative notice is revocable by the shareholder by written notice to the

corporation. Any consent to alternative notice is deemed revoked if:

     (1) The corporation is unable to deliver by facsimile or electronic transmission two (2)

consecutive notices given by the corporation in accordance with such consent; and

     (2) Such inability becomes known to the secretary or an assistant secretary of the

corporation or to the transfer agent, or other person responsible for the giving of notice; provided,

however, the inadvertent failure to treat such inability as a revocation does not invalidate the

action.

     (b) If mailed, the notice is deemed to be delivered when deposited in the United States

mail addressed to the shareholder at his or her address as it appears on the stock transfer books of

the corporation, with prepaid postage on the mail. or:

     (1) When an electronic transmission has been made to a data address provided by the

shareholder; or

     (2) When electronically transmitted to the shareholder in a manner otherwise authorized

by the shareholder.

     (c) In the case of any corporation which has fifty (50) or more shareholders of record, if

two (2) successive notices, reports or other communications addressed to a shareholder of the

corporation at the address of the shareholder appearing on the books of the corporation have been

returned to the corporation by the United States postal service marked to indicate that the United

States postal service is unable to deliver the notices, reports or other communications to the

shareholder at the address, all future notices, reports or other communications are deemed to have

been given without further mailing if they are available for the shareholder upon written demand

of the shareholder at the principal executive office of the corporation for a period of one year

from the date of the giving of the notice, report, or other communication to other shareholders.

     (d) A shareholder may waive any notice required by this section, the articles of

incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be

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in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation

for inclusion in the minutes or filing with the corporate records.

     7-1.2-708. Voting of shares.

     (a) Each outstanding share, regardless of series or class, is entitled to one vote on each

matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights

of the shares of any class or classes are limited, enlarged or denied by the articles of incorporation

as permitted by this chapter. If the articles of incorporation provide for more or less than one vote

for any share, on any matter, every reference in this chapter to a majority or other proportion of

shares refers to a majority or other proportion of votes entitled to be cast.

     (b) Shares held, directly or indirectly, by another corporation if a majority of the shares

entitled to vote for the election of directors of the other corporation is held by the corporation,

may not be voted at any meeting or counted in determining the total number of outstanding shares

at any given time. Nothing contained in these provisions is construed as limiting the right of any

corporation to vote shares, including, but not limited to, its own shares, held in a fiduciary

capacity.

     (c) Every shareholder entitled to vote at a meeting of shareholders or to express consent

without a meeting may authorize another person or persons to act for him or her by proxy,

executed, in writing, by the shareholder or by his or her duly authorized attorney in fact. No

proxy is valid after three (3) years from the date of its execution, unless otherwise provided in the

proxy.

     (1) Without limiting the manner in which a shareholder may authorize another person or

persons to act for him or her as proxy pursuant to subsection (c) of this section, the following

constitutes a valid means by which a shareholder may grant that authority:

     (i) A shareholder may execute a writing authorizing another person or persons to act for

him or her as proxy. Execution may be accomplished by the shareholder or his or her authorized

officer, director, employee or agent signing the writing or causing his or her signature to be

affixed to the writing by any reasonable means including, but not limited to, facsimile signature.

     (ii) A shareholder may authorize another person or persons to act for him or her as proxy

by transmitting or authorizing the transmission of a telegram, cablegram or other means of

electronic transmission, including internet and telephonic transmissions, to the person who will be

the holder of the proxy or to a proxy solicitation firm, proxy support service organization or an

agent authorized by the person who will be the holder of the proxy to receive the transmission,

provided that the telegram, cablegram or other means of electronic transmission must either state

or be submitted or communicated with information from which it can be determined that the

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telegram, cablegram or other electronic transmission, including internet and telephonic

transmissions, was authorized by the shareholder. If it is determined that the telegrams,

cablegrams or other electronic transmissions, including internet and telephonic transmissions, are

valid, the inspectors or, if there are no inspectors, the other persons making that determination,

shall specify the information upon which they relied.

     (2) Any reliable reproduction of the writing or transmission created pursuant to this

section may be substituted or used in lieu of the original writing or transmission for any and all

purposes for which the original writing or transmission could be used, provided that the copy,

facsimile telecommunication or other reproduction is a complete reproduction of the entire

original writing or transmission.

     (3) The death or incapacity of the shareholder appointing a proxy does not affect the right

of the corporation to accept the proxy's authority unless notice of the death or incapacity is

received by the secretary or other officer or agent authorized to tabulate votes before the proxy

exercises his or her authority under the appointment.

     (d) The articles of incorporation may provide that at each election of directors, or at

elections held under specified circumstances, every shareholder entitled to vote at the election has

the right to vote, in person or by proxy, the number of shares owned by him or her for as many

persons as there are directors to be elected and for whose election he or she has a right to vote, or

to cumulate his or her votes by giving one candidate as many votes as the number of directors

multiplied by the number of his or her shares equals, or by distributing the votes on the same

principle among any number of the candidates.

     (e) Shares standing in the name of another corporation, domestic or foreign, may be voted

by any officer, agent or proxy that the bylaws of the corporation may prescribe or, in the absence

of a provision, as the board of directors of the corporation may determine.

     (f) Shares held by an administrator, executor, guardian, custodian under a gift to minors

act, conservator or trustee may be voted by him or her, either in person or by proxy, without a

transfer of the shares into his or her name.

     (g) Shares held by two (2) or more persons as joint tenants or as tenants in common may

be voted at any meeting of the shareholders by any one of the persons, unless another joint tenant

or tenant in common seeks to vote any of the shares in person or by proxy. In the latter event, the

written agreement, if any, which governs the manner in which the shares are voted, controls if

presented at the meeting. If there is no agreement presented at the meeting, the majority in

number of the joint tenants or tenants in common present control the manner of voting. If there is

no majority, or if there are two (2) joint tenants or tenants in common, both of whom seek to vote

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the shares, the shares, for the purpose of voting, must be divided equally among the joint tenants

or tenants in common present.

     (h) Shares standing in the name of a receiver may be voted by the receiver, and shares

held by or under the control of a receiver may be voted by the receiver without the transfer of

those shares into his or her name if authority to do so is contained in an appropriate order of the

court by which the receiver was appointed.

     (i) A shareholder whose shares are pledged is entitled to vote the shares until the shares

have been transferred into the name or network signature of the pledgee, and thereafter the

pledgee is entitled to vote the shares so transferred.

     (j) On and after the date on which written notice of redemption of redeemable shares has

been mailed to the holders of the shares or data address and a sum sufficient to redeem the shares

has been deposited with a bank or trust company with irrevocable instruction and authority to pay

the redemption price to the holders of the shares upon surrender of certificates for the shares, the

shares are not entitled to vote on any matter and are not deemed to be outstanding shares.

     (k)(1) An executed proxy is irrevocable if it specifies that it is irrevocable and if, and

only so long as, it is coupled with an interest sufficient in law to support an irrevocable power

coupled with it. A proxy may be made irrevocable regardless of whether the interest with which it

is coupled is an interest in the shares itself or an interest in the corporation generally.

     (2) Without limiting the generality of subsection (k)(1) and subject to that subsection, a

proxy is coupled with an interest and is irrevocable if it is held by any of the following or a

nominee of any of the following:

     (i) A pledgee under a valid pledge;

     (ii) A person who has agreed to purchase the shares under an executory contract of sale;

     (iii) A creditor or creditors of the corporation who extend or continue credit to the

corporation in consideration of the proxy if the proxy states that it was given in consideration of

the extension or continuation of credit, the amount of the credit, and the name of the person

extending or continuing credit; and

     (iv) A person who has contracted to perform services for the corporation if a proxy is

required by the contract of employment, as part of the consideration for the contract of

employment, if the proxy states that it was given in consideration of the contract of employment,

the name of the employee, and the period of employment contracted for; provided the proxies are

respectively revocable after the pledge is redeemed, or the executory contract of sale is

performed, or the debt of the corporation is paid, or the period of employment has terminated.

     (3) A provision contained in a proxy making it irrevocable is not enforceable against a

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purchaser for value of the shares subject to the provision without actual knowledge of the

existence of the provision, unless notice of the proxy and its irrevocability appears plainly on the

certificate or certificates representing the shares; provided that if such shares are uncertificated, a

provision contained in a proxy making it irrevocable is enforceable against a purchaser for value

of the shares subject to the provision without actual knowledge of the existence of the provision

if, and only if, notice of the proxy and its irrevocability was provided in writing to such purchaser

prior to the consummation of the purchase of such shares.

     7-1.2-709. Voting trusts and agreements among shareholders.

     (a) Any number of shareholders of a corporation may create a voting trust for the purpose

of conferring upon a trustee or trustees the right to vote or otherwise represent their shares, for a

period not to exceed ten (10) years, by entering into a written voting trust agreement specifying

the terms and conditions of the voting trust, by depositing a counterpart of the agreement with the

corporation at its registered office, and by transferring their shares to the trustee or trustees for the

purposes of the agreement. The trustee or trustees shall keep a record of the holders of voting

trust certificates evidencing a beneficial interest in the voting trust, giving the names and

addresses identities of all the holders and the number and class of the shares in respect of which

the voting trust certificates held by each are issued, and shall deposit a copy of the record with the

corporation at its registered office. The list shall also show each shareholder's physical mailing

address, if the identity of a shareholder on the list consists of the shareholder's name, and each

shareholder's authorized means of receipt for electronic transmissions, if the identity of a

shareholder on the list consists of the shareholder's data address. Copies of the list and agreement

shall be delivered to the corporation's principal office. The counterpart of the voting trust

agreement and the copy of the record deposited with the corporation are subject to the same right

of examination by a shareholder of the corporation, in person or by agent or attorney, as are the

books and records of the corporation, and the counterpart and the copy of the record is subject to

examination by any holder of record of voting trust certificates, either in person or by agent or

attorney, at any reasonable time for any proper purpose. The trust certificates must state that they

are issued pursuant to the voting trust agreement, and that fact must be stated in the stock ledger

of the corporation.

     (b) Agreements among shareholders regarding the voting of their shares are valid and

enforceable in accordance with their terms for a period not to exceed ten (10) years. An

agreement is not subject to the provision of this section regarding voting trusts unless it is stated

in the agreement that it is a voting trust.

     (c) The provisions of this section are construed as permissive and should not be

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interpreted to invalidate any voting or other agreement among shareholders, or any irrevocable

proxy which is otherwise not illegal.

     (d) A voting trust or shareholders agreement may at any time or times be extended for an

additional period not in excess of ten (10) years, but the extension is binding only with respect to

those shares owned of record or beneficially by parties to the extension.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS-ELECTRONIC NETWORKS AND DATABASES

***

     This act would enable the use of electronic networks and databases for corporate records.

This act would take effect upon passage.

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