§ 620 — Agreements as to voting; provision in certificate of incorporation as to control of directors

New York § 620

• Jurisdiction: New York
• Law BSC: Business Corporation
• Art. 6: Shareholders

Text

§ 620. Agreements as to voting; provision in certificate of\n incorporation as to control of directors.\n (a) An agreement between two or more shareholders, if in writing and\nsigned by the parties thereto, may provide that in exercising any voting\nrights, the shares held by them shall be voted as therein provided, or\nas they may agree, or as determined in accordance with a procedure\nagreed upon by them.\n (b) A provision in the certificate of incorporation otherwise\nprohibited by law because it improperly restricts the board in its\nmanagement of the business of the corporation, or improperly transfers\nto one or more shareholders or to one or more persons or corporations to\nbe selected by him or them, all or any part of such management otherwise\nwithin the authority of the board under this chapter, shall nevertheless\nbe valid:\n (1) If all the incorporators or holders of record of all outstanding\nshares, whether or not having voting power, have authorized such\nprovision in the certificate of incorporation or an amendment thereof;\nand\n (2) If, subsequent to the adoption of such provision, shares are\ntransferred or issued only to persons who had knowledge or notice\nthereof or consented in writing to such provision.\n (c) A provision authorized by paragraph (b) shall be valid only so\nlong as no shares of the corporation are listed on a national securities\nexchange or regularly quoted in an over-the-counter market by one or\nmore members of a national or affiliated securities association.\n (d) (1) Except as provided in paragraph (e), an amendment to strike\nout a provision authorized by paragraph (b) shall be authorized at a\nmeeting of shareholders by (A) (i) for any corporation in existence on\nthe effective date of subparagraph (2) of this paragraph, two-thirds of\nthe votes of the shares entitled to vote thereon and (ii) for any\ncorporation in existence on the effective date of this clause the\ncertificate of incorporation of which expressly provides such and for\nany corporation incorporated after the effective date of subparagraph\n(2) of this paragraph, a majority of the votes of the shares entitled to\nvote thereon or (B) in either case, by such greater proportion of votes\nof shares as may be required by the certificate of incorporation for\nthat purpose.\n (2) Any corporation may adopt an amendment of the certificate of\nincorporation in accordance with the applicable clause or subclause of\nsubparagraph (1) of this paragraph to provide that any further amendment\nof the certificate of incorporation that strikes out a provision\nauthorized by paragraph (b) of this section shall be authorized at a\nmeeting of the shareholders by a specified proportion of votes of the\nshares, or votes of a particular class or series of shares, entitled to\nvote thereon, provided that such proportion may not be less than a\nmajority.\n (e) Alternatively, if a provision authorized by paragraph (b) shall\nhave ceased to be valid under this section, the board may authorize a\ncertificate of amendment under section 805 (Certificate of amendment;\ncontents) striking out such provision. Such certificate shall set forth\nthe event by reason of which the provision ceased to be valid.\n (f) The effect of any such provision authorized by paragraph (b) shall\nbe to relieve the directors and impose upon the shareholders authorizing\nthe same or consenting thereto the liability for managerial acts or\nomissions that is imposed on directors by this chapter to the extent\nthat and so long as the discretion or powers of the board in its\nmanagement of corporate affairs is controlled by any such provision.\n (g) If the certificate of incorporation of any corporation contains a\nprovision authorized by paragraph (b), the existence of such provision\nshall be noted conspicuously on the face or back of every certificate\nfor shares issued by such corporation.\n