Sponsored by:
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
Updates law governing votes by shareholders for items other than for election of members to board of directors.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning votes at shareholder meetings and amending N.J.S.14A:5-11.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.14A:5-11 is amended to read as follows:
14A:5-11. (1) Whenever any action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon, unless a greater [plurality] vote is required by the certificate of incorporation or another section of [this act] N.J.S.14A:1-1 et seq.; provided, however, that a vote requirement that calls for any such action to be authorized by a majority of the shares present or represented by proxy at a meeting and entitled to vote thereon may also be provided for in, and authorized by, the bylaws.
(2) The certificate of incorporation may provide that any class or classes of shares, or any series thereof, shall vote as a class to authorize any action, including amendments to the certificate of incorporation. Such voting as a class shall be in addition to any other vote required by [this act] N.J.S.14A:1-1 et seq. Where voting as a class or series is provided in the certificate of incorporation, it shall be by the proportionate vote provided in the certificate or, if no proportionate vote is so provided, then for any action other than the election of directors, by a majority of the votes cast at such meeting by the holders of shares of such class or series entitled to vote thereon.
(3) Where voting as a class or series is required by [this act] N.J.S.14A:1-1 et seq. to authorize any action, such action shall be authorized by a majority of the votes cast at such meeting by the holders of shares of each such class or series entitled to vote thereon, unless a greater vote is required by the certificate of incorporation or another section of [this act] N.J.S.14A:1-1 et seq. Such voting as a class shall be in addition to any other vote required by [this act] N.J.S.14A:1-1 et seq.
(cf: P.L.1968, c.350)
2. This act shall take effect immediately and shall apply to votes that take place on or after the date of enactment.
STATEMENT
This bill updates the statute governing voting by shareholders for items other than for the election of members to the board of directors. Current law specifies that whenever any action, other than for the election of directors, is to be taken by vote of the shareholders, it is to be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote, unless a greater vote is required by the certificate of incorporation or another section of current law. Under the bill, it provides that a requirement that calls for an action to be authorized by a majority of the shareholders present or represented by proxy at the meeting and entitled to vote on the subject matter may be provided for in and authorized by the bylaws of the corporation.