AN
ACT Relating to the transmission of proxy appointments by electronic or other
nonwritten means as applied to the Washington business corporation act; and
amending RCW 23B.01.400, 23B.07.220, and 23B.07.240.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
23B.01.400 and 1996 c 155 s 4 are each amended to read as follows:
Unless
the context clearly requires otherwise, the definitions in this section apply
throughout this title.
(1)
"Articles of incorporation" include amended and restated articles of
incorporation and articles of merger.
(2)
"Authorized shares" means the shares of all classes a domestic or
foreign corporation is authorized to issue.
(3)
"Conspicuous" means so written that a reasonable person against whom
the writing is to operate should have noticed it. For example, printing in
italics or boldface or contrasting color, or typing in capitals or underlined,
is conspicuous.
(4)
"Corporation" or "domestic corporation" means a corporation
for profit, which is not a foreign corporation, incorporated under or subject
to the provisions of this title.
(5)
"Deliver" includes (a) mailing and (b) for purposes of delivering a
demand, consent, or waiver to the corporation or one of its officers,
transmission by facsimile equipment.
(6)
"Distribution" means a direct or indirect transfer of money or other
property, except its own shares, or incurrence of indebtedness by a corporation
to or for the benefit of its shareholders in respect to any of its shares. A
distribution may be in the form of a declaration or payment of a dividend; a
distribution in partial or complete liquidation, or upon voluntary or
involuntary dissolution; a purchase, redemption, or other acquisition of
shares; a distribution of indebtedness; or otherwise.
(7)
"Effective date of notice" has the meaning provided in RCW
23B.01.410.
(8)
"Electronic transmission" or "electronically
transmitted" means any process of electronic communication not directly
involving the physical transfer of paper that is suitable for the retention,
retrieval, and reproduction of the transmitted information by the recipient.
(9)
"Employee" includes an officer but not a director. A director may
accept duties that make the director also an employee.
(((9)))
(10) "Entity" includes a corporation and foreign corporation,
not-for-profit corporation, profit and not-for-profit unincorporated
association, business trust, estate, partnership, trust, and two or more
persons having a joint or common economic interest, and the state, United
States, and a foreign government.
(((10)))
(11) "Foreign corporation" means a corporation for profit
incorporated under a law other than the law of this state.
(((11)))
(12) "Foreign limited partnership" means a partnership formed
under laws other than of this state and having as partners one or more general
partners and one or more limited partners.
(((12)))
(13) "Governmental subdivision" includes authority, county,
district, and municipality.
(((13)))
(14) "Includes" denotes a partial definition.
(((14)))
(15) "Individual" includes the estate of an incompetent or
deceased individual.
(((15)))
(16) "Limited partnership" or "domestic limited
partnership" means a partnership formed by two or more persons under the
laws of this state and having one or more general partners and one or more
limited partners.
(((16)))
(17) "Means" denotes an exhaustive definition.
(((17)))
(18) "Notice" has the meaning provided in RCW 23B.01.410.
(((18)))
(19) "Person" includes an individual and an entity.
(((19)))
(20) "Principal office" means the office, in or out of this
state, so designated in the annual report where the principal executive offices
of a domestic or foreign corporation are located.
(((20)))
(21) "Proceeding" includes civil suit and criminal, administrative,
and investigatory action.
(((21)))
(22) "Public company" means a corporation that has a class of
shares registered with the federal securities and exchange commission pursuant
to section 12 or 15 of the securities exchange act of 1934, or section 8 of the
investment company act of 1940, or any successor statute.
(((22)))
(23) "Record date" means the date established under chapter
23B.07 RCW on which a corporation determines the identity of its shareholders
and their shareholdings for purposes of this title. The determinations shall
be made as of the close of business on the record date unless another time for
doing so is specified when the record date is fixed.
(((23)))
(24) "Secretary" means the corporate officer to whom the board
of directors has delegated responsibility under RCW 23B.08.400(3) for custody
of the minutes of the meetings of the board of directors and of the
shareholders and for authenticating records of the corporation.
(((24)))
(25) "Shares" means the units into which the proprietary
interests in a corporation are divided.
(((25)))
(26) "Shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(((26)))
(27) "State," when referring to a part of the United States,
includes a state and commonwealth, and their agencies and governmental
subdivisions, and a territory and insular possession, and their agencies and
governmental subdivisions, of the United States.
(((27)))
(28) "Subscriber" means a person who subscribes for shares in
a corporation, whether before or after incorporation.
(((28)))
(29) "United States" includes a district, authority, bureau,
commission, department, and any other agency of the United States.
(((29)))
(30) "Voting group" means all shares of one or more classes or
series that under the articles of incorporation or this title are entitled to
vote and be counted together collectively on a matter at a meeting of
shareholders. All shares entitled by the articles of incorporation or this
title to vote generally on the matter are for that purpose a single voting
group.
Sec.
2. RCW
23B.07.220 and 1989 c 165 s 70 are each amended to read as follows:
(1)
A shareholder may vote the shareholder's shares in person or by proxy.
(2)
A shareholder or the shareholder's agent or attorney-in-fact may appoint
a proxy to vote or otherwise act for the shareholder by ((signing an
appointment form, either personally or by the shareholder's attorney-in-fact or
agent)):
(a)
Executing a writing authorizing another person or persons to act for the
shareholder as proxy. Execution may be accomplished by the shareholder or the
shareholder's authorized officer, director, employee, or agent signing the
writing or causing his or her signature to be affixed to the writing by any
reasonable means including, but not limited to, by facsimile signature; or
(b)
Authorizing another person or persons to act for the shareholder as proxy by
transmitting or authorizing the transmission of an electronic transmission to
the person who will be the holder of the proxy or to a proxy solicitation firm,
proxy support service organization, or like agent duly authorized by the person
who will be the holder of the proxy to receive the transmission, provided that
the electronic transmission must either set forth or be submitted with
information, including any security or validation controls used, from which it
can reasonably be determined that the electronic transmission was authorized by
the shareholder. If it is determined that the electronic transmission is
valid, the inspectors of election or, if there are no inspectors, any officer
or agent of the corporation making that determination on behalf of the
corporation shall specify the information upon which they relied. The
corporation shall require the holders of proxies received by electronic
transmission to provide to the corporation copies of the electronic
transmission and the corporation shall retain copies of the electronic
transmission for a reasonable period of time after the election provided that
they are retained for at least sixty days.
(3)
An appointment of a proxy is effective when a signed appointment form or
telegram, cablegram, recorded telephone call, voicemail, or other electronic
transmission of the appointment is received by the ((secretary or other))
inspectors of election or the officer or agent of the corporation
authorized to tabulate votes. An appointment is valid for eleven months unless
a longer period is expressly provided in the appointment ((form)).
(4)
An appointment of a proxy is revocable by the shareholder unless the
appointment indicates that it is irrevocable and the appointment is
coupled with an interest. Appointments coupled with an interest include the
appointment of:
(a)
A pledgee;
(b)
A person who purchased or agreed to purchase the shares;
(c)
A creditor of the corporation who extended it credit under terms requiring the
appointment;
(d)
An employee of the corporation whose employment contract requires the
appointment; or
(e)
A party to a voting agreement created under RCW 23B.07.310.
(5)
The death or incapacity of the shareholder appointing a proxy does not affect
the right of the corporation to accept the proxy's authority unless notice of
the death or incapacity is received by the ((secretary or other))
officer or agent of the corporation authorized to tabulate votes before the
proxy exercises the proxy's authority under the appointment.
(6)
An appointment made irrevocable under subsection (4) of this section is revoked
when the interest with which it is coupled is extinguished.
(7)
A transferee for value of shares subject to an irrevocable appointment may
revoke the appointment if the transferee did not know of its existence when the
transferee acquired the shares and the existence of the irrevocable appointment
was not noted conspicuously on the certificate representing the shares or on
the information statement for shares without certificates.
(8)
Subject to RCW 23B.07.240 and to any express limitation on the proxy's
authority ((appearing on the face of)) stated in the appointment
form or electronic transmission, a corporation is entitled to accept the
proxy's vote or other action as that of the shareholder making the appointment.
(9)
For the purposes of this section only, "sign" or
"signature" includes any manual, facsimile, conformed, or electronic
signature.
Sec.
3. RCW
23B.07.240 and 1989 c 165 s 72 are each amended to read as follows:
(1)
If the name signed on a vote, consent, waiver, or proxy appointment corresponds
to the name of a shareholder, the corporation, if acting in good faith, is
entitled to accept the vote, consent, waiver, or proxy appointment and give it
effect as the act of the shareholder.
(2)
If the name signed on a vote, consent, waiver, or proxy appointment does not
correspond to the name of its shareholder, the corporation, if acting in good
faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy
appointment and give it effect as the act of the shareholder if:
(a)
The shareholder is an entity and the name signed purports to be that of an
officer, partner, or agent of the entity;
(b)
The name signed purports to be that of an administrator, executor, guardian, or
conservator representing the shareholder and, if the corporation requests,
evidence of fiduciary status acceptable to the corporation has been presented
with respect to the vote, consent, waiver, or proxy appointment;
(c)
The name signed purports to be that of a receiver or trustee in bankruptcy of
the shareholder and, if the corporation requests, evidence of this status
acceptable to the corporation has been presented with respect to the vote,
consent, waiver, or proxy appointment;
(d)
The name signed purports to be that of a pledgee, beneficial owner, or
attorney-in-fact of the shareholder and, if the corporation requests, evidence
acceptable to the corporation of the signatory's authority to sign for the
shareholder has been presented with respect to the vote, consent, waiver, or
proxy appointment; or
(e)
Two or more persons are the shareholder as cotenants or fiduciaries and the
name signed purports to be the name of at least one of the coowners and the
person signing appears to be acting on behalf of all the coowners.
(3)
The corporation is entitled to reject a vote, consent, waiver, or proxy
appointment if the secretary or other officer or agent authorized to tabulate
votes, acting in good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to sign for the
shareholder.
(4)
The corporation and its officer or agent who accepts or rejects a vote,
consent, waiver, or proxy appointment in good faith and in accordance with the
standards of this section or RCW 23B.07.220(2) are not liable in damages
to the shareholder for the consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a
vote, consent, waiver, or proxy appointment under this section, or RCW
23B.07.220(2) is valid unless a court of competent jurisdiction determines
otherwise.
