§ 12:1-732 — Unanimous governance agreements

A. The term "unanimous governance agreement" means any written agreement, other than the articles of incorporation or bylaws, that satisfies all of the following criteria:
(1) Is approved in one or more writings signed by all persons who are shareholders at the time of the agreement.
(2) Governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them.
(3) States that it is a unanimous governance agreement or that it is governed by this Section.
B. A unanimous governance agreement is effective among the shareholders and the corporation, and shall be interpreted and enforced among those persons in accordance with the principle of freedom of contract, subject only to the limitations imposed by public policy. A unanimous governance agreement is enforceable among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Chapter in that it does any of the following:
(1) Eliminates the board of directors or restricts the discretion or powers of the board of directors.
(2) Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in R.S. 12:1-640.
(3) Establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal.
(4) Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies.
(5) Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them.
(6) Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders.
(7) Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency.
(8) Otherwise changes, in a manner not contrary to public policy, the result that would be reached under other provisions of this Chapter.
C.(1) The existence of a unanimous governance agreement shall be noted conspicuously on the front or back of each certificate for outstanding shares. If, at the time of the agreement, the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this Subsection. The failure to note the existence of the agreement on the certificate shall not affect the validity of the agreement or any action taken pursuant to it.
(2) Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate for the shares in compliance with this Subsection.
(3) An action to enforce the right of rescission authorized by this Subsection must be commenced within the earlier of ninety days after discovery of the existence of the agreement or two years after the time of purchase of the shares.
D. The provisions of a unanimous governance agreement shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete any references to it.
E. A unanimous governance agreement that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement. A person who is subjected to liability by this Subsection may be held liable only to the extent that a director vested with the same discretion or powers could be held liable, and is entitled to indemnity under R.S. 12:1-850 through 1-859, and to protection against liability under R.S. 12:1-832, to the same extent as a director vested with the same discretion or powers.
F. The existence or performance of a unanimous governance agreement shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.
G. Incorporators or subscribers for shares may act as shareholders with respect to a unanimous governance agreement if no shares have been issued when the agreement is made.
H. If the shareholders have approved more than one unanimous governance agreement, all of the agreements shall, to the extent reasonable, be construed together as one agreement in which all provisions are given effect. To the extent that conflicting provisions cannot be reconciled through that rule of construction, the more recently-approved provision controls.
I. Except as otherwise provided in the agreement, a unanimous governance agreement shall have all of the following characteristics:
(1) Has an initial term of twenty years.
(2) May be renewed during the initial or any subsequent term for an additional term of up to twenty years after the renewal is approved, by means of one or more written consents to the renewal, signed by all persons who are shareholders at the time of the renewal, and delivered to the corporation in accordance with R.S. 12:1-704(C).
(3) May be amended or terminated during its initial or any subsequent term by means of one or more written consents to the amendment or termination, signed by all persons who are shareholders at the time of the termination or amendment, and delivered to the corporation in accordance with R.S. 12:1-704(C).
(4) Continues in effect even after the expiration of its term, as renewed, until one or more written consents to its termination, signed by the shareholders of at least twenty-five percent of the issued shares of any class are delivered to the corporation in accordance with R.S. 12:1-704(C).
J. The corporation shall send notice of any renewal, amendment, or termination of a unanimous governance agreement to all shareholders within ten days after the effective date of the renewal, amendment, or termination, but the renewal, amendment, or termination is effective even if the notice is not sent.
K. This Section does not affect the enforceability of any agreement among shareholders that is not a unanimous governance agreement as defined in Subsection A of this Section.

Legislative History

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.