§ 207 — Board of directors of a franchised corporation

* § 207. Board of directors of a franchised corporation. 1. a. The\nboard of directors, to be called the New York racing association\nreorganization board, shall consist of seventeen members, five of whom\nshall be elected by the present class A directors of The New York Racing\nAssociation, Inc., eight to be appointed by the governor, two to be\nappointed by the temporary president of the senate and two to be\nappointed by the speaker of the assembly.\n (i) The governor shall nominate a member to serve as chair, subject to\nconfirmation by majority vote of the board of directors. All non-ex\nofficio members shall have equal voting rights.\n (ii) In the event of a member vacancy occurring by death, resignation\nor otherwise, the respective appointing officer or officers shall\nappoint a successor who shall hold office for the unexpired portion of\nthe term. A vacancy from the members appointed from the present board of\nThe New York Racing Association, Inc., shall be filled by the remaining\nsuch members.\n * b. The franchised corporation shall establish a compensation\ncommittee to fix salary guidelines, such guidelines to be consistent\nwith an operation of other first class thoroughbred racing operations in\nthe United States; a finance committee, to review annual operating and\ncapital budgets for each of the three racetracks; a nominating\ncommittee, to nominate any new directors to be designated by the\nfranchised corporation to replace its existing directors; and an\nexecutive committee. Each of the compensation, finance, nominating and\nexecutive committees shall include at least one of the directors\nappointed by the governor, and the executive committee shall include at\nleast one of the directors appointed by the temporary president of the\nsenate and at least one of the directors appointed by the speaker of the\nassembly.\n * NB There are 2 par b's\n * b. In addition to these voting members, the board shall have two ex\nofficio members to advise on critical economic and equine health\nconcerns of the racing industry, one appointed by the New York\nThoroughbred Breeders Inc., and one appointed by the New York\nthoroughbred horsemen's association (or such other entity as is\ncertified and approved pursuant to section two hundred twenty-eight of\nthis article).\n * NB There are 2 par b's\n * c. All directors shall serve at the pleasure of their appointing\nauthority.\n * NB There are 2 par c's\n * c. Upon the effective date of this paragraph, the structure of the\nboard of the franchised corporation shall be deemed to be incorporated\nwithin and made part of the certificate of incorporation of the\nfranchised corporation, and no amendment to such certificate of\nincorporation shall be necessary to give effect to any such provision,\nand any provision contained within such certificate inconsistent in any\nmanner shall be superseded by the provisions of this section. Such board\nshall, however, make appropriate conforming changes to all governing\ndocuments of the franchised corporation including but not limited to\ncorporate by-laws. Following such conforming changes, amendments to the\nby-laws of the franchised corporation shall only be made by unanimous\nvote of the board.\n * NB There are 2 par c's\n d. The board, which shall become effective upon appointment of a\nmajority of public members, shall terminate five years from its date of\ncreation.\n 2. Members of the board of directors shall serve without compensation\nfor their services, but publicly appointed members of the board shall be\nentitled to reimbursement from the franchised corporation for actual and\nnecessary expenses incurred in the performance of their official duties.\n 3. Members of the board of directors, except as otherwise provided by\nlaw, may engage in private employment, or in a profession or business,\nhowever no member shall have any direct or indirect economic interest in\nany video lottery gaming facility, excluding incidental benefits based\non purses or awards won in the ordinary conduct of racing operations, or\nany direct or indirect interest in any development undertaken at the\nracetracks of the state racing franchise.\n 4. The affirmative vote of a majority of members of the board of\ndirectors shall be necessary for the transaction of any business or the\nexercise of any power or function of the franchised corporation. The\nfranchised corporation may delegate on an annual basis to one or more of\nits members, or its officers, agents or employees, such powers and\nduties as it may deem proper.\n 5. Each voting member of the board of directors of the franchised\ncorporation shall annually make a written disclosure to the board of any\ninterest held by the director, such director's spouse or unemancipated\nchild, in any entity undertaking business in the racing or breeding\nindustry. Such interest disclosure shall be promptly updated, in\nwriting, in the event of any material change.\n The board shall establish parameters for the reporting and disclosure\nof such director interests.\n * NB Effective until the appointment of a majority of the state\nfranchise oversight board members\n * § 207. Board of directors of a franchised corporation. 1. a. The\nboard of directors, to be called the New York racing association board,\nshall consist of seventeen members who shall have equal voting rights:\ntwo appointed by the governor, two appointed by the temporary president\nof the senate and two appointed by the speaker of the assembly; eight\nappointed by the executive committee of the New York racing association\nreorganization board of directors constituted pursuant to chapter four\nhundred fifty-seven of the laws of two thousand twelve, which shall\ncontinue to exist until such time as the appointments required hereunder\nare made. The New York racing association will include knowledge of the\nmarketplace and communities in which the New York racing association\noperates as a factor in board selection; one who shall be the president\nand chief executive officer of the franchised corporation, ex officio\nand without term limitation; one appointed by the New York Thoroughbred\nBreeders, Inc.; and one appointed by the New York thoroughbred\nhorsemen's association representing at least fifty-one percent of the\nhorsemen using the facilities of the franchised corporation. The New\nYork racing association board may include additional ex officio,\nnon-voting members as appointed pursuant to a majority vote of the\nboard. All public appointed members of the board shall be a resident of\nNew York state.\n (i) The governor shall nominate a member to serve as chair for an\ninitial term of three years, who shall serve at the pleasure of the\ngovernor, subject to confirmation by majority vote of the board.\nThereafter, the board shall elect its chair, who shall serve at the\npleasure of the board, from among its members.\n (ii) The term of voting membership on the New York racing association\nboard shall be three years. Individual appointees shall be limited to\nserving as a voting member the lesser of three terms or nine years.\nNotwithstanding the foregoing, the initial term of one member appointed\nby each of the governor, temporary president of the senate, and speaker\nof the assembly, the member appointed by the New York thoroughbred\nhorsemen's association, and the member appointed by the New York\nThoroughbred Breeders, Inc. shall expire March thirty-first, two\nthousand eighteen; the initial term of the remaining members appointed\nby each of the governor, temporary president of the senate, and speaker\nof the assembly and two members appointed by the New York racing\nassociation reorganization board shall expire on March thirty-first, two\nthousand nineteen; the initial term of three members appointed by the\nNew York racing association reorganization board shall expire on March\nthirty-first, two thousand twenty-one, and the initial term of three\nmembers appointed by the New York racing association reorganization\nboard shall expire on March thirty-first, two thousand twenty-three. The\neight initial members appointed by the New York racing association\nreorganization board shall hold appointment as a voting member for the\ngreater of three terms or nine years.\n (iii) In the event of a member vacancy occurring by death, resignation\nor otherwise, the respective appointing authority shall appoint a\nsuccessor who shall hold office for the unexpired portion of the term.\nIn the case of vacancies among members appointed by the executive\ncommittee of the New York racing association reorganization board of\ndirectors constituted pursuant to chapter four hundred fifty-seven of\nthe laws of two thousand twelve, appointments thereafter shall be made\nby the executive committee of the New York racing association board as\nconstituted by the chapter of the laws of two thousand seventeen that\namended this section.\n (iv) Beginning January first, two thousand twenty-six, one member\nappointed by the governor, one member appointed by the temporary\npresident of the senate, one member appointed by the speaker of the\nassembly, and four members appointed by the executive committee of the\nNew York racing association board of directors shall satisfy at least\none of the following requirements at the time of appointment or\nreappointment: (1) over the three years prior, owned or trained horses\nwith a cumulative average of fifteen starts at New York race tracks per\nyear, (2) be a breeder of record registered with the thoroughbred\nbreeding and development fund, (3) be a managing partner in a New York\nstate-based ownership syndicate licensed with the commission, or (4)\nhave a cogent interest in the racing and breeding industry in the state.\nThe provisions of this subparagraph shall not impact any members serving\nas of January first, two thousand twenty-six.\n (v) Beginning January first, two thousand twenty-six, all non-publicly\nappointed members must hold a license pursuant to section two hundred\ntwenty of this article.\n b. The franchised corporation shall establish a compensation committee\nto fix salary guidelines, such guidelines to be consistent with an\noperation of other first class thoroughbred racing operations in the\nUnited States; a finance and audit committee, to review annual operating\nand capital budgets for each of the three racetracks; a nominating and\ngovernance committee, to nominate any new directors to be designated by\nthe franchised corporation to replace its existing directors and be\nresponsible for all issues affecting the governance of the franchised\ncorporation; an equine safety committee to review industry best\npractices to improve the safety of horse racing of the three racetracks;\na racing committee to address all issues related to racing operations;\nand an executive committee. Each of the compensation, finance,\nnominating and executive committees shall include at least one public\nmember from among the directors appointed by the governor.\n c. Upon the effective date of this paragraph, the structure of the New\nYork racing association board shall be deemed to be incorporated within\nand made part of the certificate of incorporation of the franchised\ncorporation, and no amendment to such certificate of incorporation shall\nbe necessary to give effect to any such provision, and any provision\ncontained within such certificate inconsistent in any manner shall be\nsuperseded by the provisions of this section. Such board shall, however,\nmake appropriate conforming changes to all governing documents of the\nfranchised corporation including but not limited to corporate by-laws.\nFollowing such conforming changes, amendments to the by-laws of the\nfranchised corporation shall be made only by unanimous vote of the\nboard.\n 2. Members of the New York racing association board shall serve\nwithout compensation for their services, but shall be entitled to\nreimbursement from the franchised corporation for actual and necessary\nexpenses incurred in the performance of their duties for the board.\n 3. Members of the New York racing association board, except as\notherwise provided by law, may engage in private employment, or in a\nprofession or business, however no member shall have any direct or\nindirect economic interest in any video lottery gaming facility,\nexcluding incidental benefits based on purses or awards won in the\nordinary conduct of racing operations, or any direct or indirect\ninterest in any development undertaken at the racetracks of the state\nracing franchise including real estate development parcels as defined in\nthe franchise agreement.\n 4. The affirmative vote of a majority of members of the New York\nracing association board shall be necessary for the transaction of any\nbusiness or the exercise of any power or function of the franchised\ncorporation. The franchised corporation may delegate on an annual basis\nto one or more of its members, or its officers, agents or employees,\nsuch powers and duties as it may deem proper.\n 5. Each voting member of the New York racing association board of the\nfranchised corporation shall annually make a written disclosure to such\nboard of any interest held by the director, such director's spouse or\nunemancipated child, in any entity undertaking business in the racing or\nbreeding industry. Such interest disclosure shall be promptly updated,\nin writing, in the event of any material change.\n The New York racing association board shall establish parameters for\nthe reporting and disclosure of such director interests.\n 6. Each voting member of the New York racing association board\nappointed by the executive committee of the New York racing association\nreorganization board of directors shall seek a racetrack management\nlicense issued by the gaming commission, any fees for which shall be\nwaived by the commission. No voting member of the board required by the\nforegoing to seek a racetrack management license may vote on any board\nmatter until such license is issued.\n 7. For purposes of section two hundred twelve of this article, the\nestablishment of The New York Racing Association, Inc. board of\ndirectors under this section shall not constitute the assumption of the\nfranchise by a successor entity.\n 8. The franchise corporation shall not have any direct or indirect\nownership, control, influence, or investment, in any franchise oversight\nboard approved development or such alternative use as may be approved by\nthe franchise oversight board conducted on the real estate development\nparcels as defined in the franchise agreement.\n * NB Effective upon the appointment of a majority of the state\nfranchise oversight board members\n