February 26, 2003, Introduced by Senators ALLEN and SCHAUER and referred to the Committee on Commerce and Labor.
A bill to amend 1972 PA 284, entitled
"Business corporation act,"
by amending sections 506, 511, 611, and 798 (MCL 450.1506,
450.1511, 450.1611, and 450.1798), sections 506 and 511 as
amended by 1989 PA 121, section 611 as amended by 1997 PA 118,
and section 798 as added by 1988 PA 58.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 506. (1) The articles of incorporation or a bylaw
2 adopted by the shareholders or incorporators may provide that in
3 lieu of annual election
of all directors, the directors be
4 board is divided into 2
or 3 classes, each to be with as nearly
5 equal in a
number of directors as possible. The term of office
6 of directors in the first class shall expire at the first annual
7 meeting of shareholders after their election, that of the second
8 class shall expire at the second annual meeting after their
1 election, and that of the third class, if any, shall expire at
2 the third annual meeting after their election. At each annual
3 meeting after such
classification, the directors are divided
4 into classes, the shareholders shall elect a number of directors
5 equal to the number of the class whose term expires at the time
6 of the meeting, shall
be elected to hold office until the
7 second succeeding annual
meeting if there are 2 classes , or
8 until the third succeeding annual meeting if there are 3
9 classes.
10 (2) Unless the articles of incorporation otherwise provide,
11 if a board is divided into classes under subsection (1), a
12 corporation shall not by amendment to its articles of
13 incorporation or bylaws reduce the term of office of a director,
14 amend or repeal a provision dividing the board into classes, or
15 increase or decrease the number of directors without the prior
16 approval of a majority of the directors then in office.
17 (3) (2) A
corporation having that has more than 1 class
18 or series of shares may provide in its articles for election of 1
19 or more directors by shareholders of a class or series, to the
20 exclusion of other shareholders.
21 Sec. 511. (1) The shareholders may remove 1 or more
22 directors with or without cause unless the articles of
23 incorporation provide that directors may be removed only for
24 cause and except that, for a corporation whose board is divided
25 into classes under section 506(1), shareholders may remove
26 directors only for cause unless the articles of incorporation
27 allow removal without cause.
The vote for removal shall be by
1 of a majority of shares entitled to vote at an election of
2 directors is required for removal except that the articles may
3 require a higher vote for removal without cause. This section
4 shall does not invalidate any bylaw adopted before the
5 effective date of the
act which added this sentence October
1,
6 1989 insofar as the bylaw applies to removal without cause.
7 (2) In the case of a
corporation having that has cumulative
8 voting, if less than the
entire board is to be removed, no 1 of
9 the directors may be
removed the shareholders may not
remove a
10 director if the votes
cast against his or her removal would be
11 are sufficient to elect him or her if then cumulatively voted at
12 an election of the entire board of directors, or, if there are
13 classes of directors, at an election of the class of directors of
14 which he or she is a part.
15 (3) If holders of a class or series of stock or of bonds are
16 entitled by the articles to elect 1 or more directors, this
17 section applies, with
respect to removal of a director so
18 elected by those holders, to the vote of the holders of the
19 outstanding shares of that class or series of stock or the
20 holders of those bonds.
21 Sec. 611. (1) Before the first meeting of the board, the
22 incorporators may amend the articles of incorporation by
23 complying with subsection
(1) of section 631 631(1).
24 (2) Unless the articles of incorporation provide otherwise,
25 the board may adopt 1 or more of the following amendments to the
26 corporation's articles of incorporation without shareholder
27 action:
1 (a) Extend the duration of the corporation if it was
2 incorporated at a time when limited duration was required by
3 law.
4 (b) Delete the names and addresses of the initial directors.
5 (c) Delete the name and address of the initial resident agent
6 or registered office, if a statement of change is on file with
7 the administrator.
8 (d) Change each issued and unissued authorized share of an
9 outstanding class into a greater number of whole shares if the
10 corporation has only shares of that class outstanding.
11 (e) Change the corporate name by substituting the word
12 "corporation", "incorporated", "company", "limited", or the
13 abbreviation "corp.", "inc.", "co.", or "ltd.", for a similar
14 word or abbreviation in the corporate name, or by adding,
15 deleting, or changing a geographical attribution for the
16 corporate name.
17 (f) Any other change expressly permitted by this act to be
18 made without shareholder action.
19 (3) Other amendments of the articles of incorporation, except
20 as otherwise provided in this act, shall be approved by the
21 shareholders as provided in this section.
22 (4) If a corporation has securities registered under section
23 12 of the securities exchange act of 1934, chapter 404, 48
24 Stat. 892, 15 U.S.C. 78l, a proposed amendment to the articles of
25 incorporation must be adopted by the board of directors.
26 (5) (4) Notice
of a meeting setting forth the proposed
27 amendment or a summary of the changes to be effected by the
1 proposed amendment shall be given to each shareholder of record
2 entitled to vote on the proposed amendment within the time and in
3 the manner provided in this act for giving notice of meetings of
4 shareholders.
5 (6) (5) At
the meeting, a vote of shareholders entitled to
6 vote shall be taken on
the proposed amendment. The A proposed
7 amendment shall be is
adopted upon receiving if it receives
8 the affirmative vote of a majority of the outstanding shares
9 entitled to vote on the proposed amendment and, in addition, if
10 any class or series of shares is entitled to vote on the proposed
11 amendment as a class, the affirmative vote of a majority of the
12 outstanding shares of
each such class or series entitled to
13 vote. The voting requirements of this section are subject to
14 greater requirements as prescribed by this act for specific
15 amendments , or
as may be provided by required in the
16 articles of incorporation.
17 (7) (6)
Any The shareholders may act on any number of
18 amendments may be
acted upon at 1 at a meeting.
19 (8) (7) Upon
adoption, a certificate of amendment shall be
20 filed as provided in section 631.
21 Sec. 798. (1) Control shares acquired in a control share
22 acquisition have the same voting rights as were accorded the
23 shares before the control share acquisition only to the extent
24 granted by resolution approved by the shareholders or directors
25 of the issuing public corporation.
26 (2) To be approved by
the shareholders under this section,
27 the subsection (1), a resolution shall be approved
by both all
1 of the following:
2 (a) A majority of the
votes cast by the holders of shares
3 shareholders entitled to
vote thereon, and if the on the
4 resolution.
5 (b) If a proposed control share acquisition would, if fully
6 carried out, result in
any action which that would require a
7 vote as class or series, by a majority of the votes cast by the
8 holders of shares shareholders of each such that
class or
9 series. entitled
to vote thereon.
10 (c) (b) A
majority of the votes cast by the holders of
11 shares shareholders entitled to vote and a majority
of the votes
12 cast by the holders
of shares shareholders of each class or
13 series entitled to vote as a class or series, excluding all
14 interested shares.
15 (3) To be approved by the directors under subsection (1), a
16 resolution shall be approved by 1 of the following:
17 (a) If before or at the time of a control share acquisition,
18 by a majority of the directors.
19 (b) If after a control share acquisition, by a majority of
20 those directors in office at the time of the approval who also
21 were directors at the time of the control share acquisition.