By Senator Waggoner
ENROLLED, An Act,
To amend Sections 10-2B-16.20 and 10-2B-7.22, Code of Alabama 1975, to provide that a corporation would provide a financial statement to a shareholder if the shareholder requests the statement; and to provide for voting of a shareholder's shares by a shareholder by electronic means, including the Internet.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 10-2B-16.20 and 10-2B-7.22, Code of Alabama 1975, are amended to read as follows:§10-2B-16.20.
"(a) A corporation shall furnish its annual financial statements to each shareholder who requests a statement, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of changes in shareholders' equity for the year unless that information appears elsewhere in the financial statements. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis. If the financial statements for the corporation are not prepared on the basis of generally accepted accounting principles, the annual financial statements furnished shareholders may be prepared either on the same basis used by the corporation for filing its United States income tax returns or as required by appropriate regulatory agencies.
"(b) If the annual financial statements are reported upon by a public accountant, his or her report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation's accounting records:
"(1) Stating his or her reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
"(2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
"(c) A corporation shall mail or deliver by electronic transmission the annual financial statements to each shareholder who requests a statement within 120 days after the close of each fiscal year. Thereafter, on written request from a shareholder who was not mailed the statements, the corporation shall mail or deliver by electronic transmission him or her the latest annual financial statements.
§10-2B-7.22.
"(a) A shareholder may vote his or her shares in person or by means of a secured electronic transmission or by proxy. An electronic transmission must contain or be accompanied by information from which one can reasonably determine that the shareholder authorized the transmission and that it is the shareholder who actually votes or corresponds on the transmission.
"(b) A shareholder or his or her agent or attorney-in-fact may appoint a proxy to vote or otherwise act for him or her by signing an appointment form or by means of an electronic transmission. An electronic transmission must contain or be accompanied by information from which one can determine that the shareholder, the shareholder's agent, or the shareholder's attorney-in-fact authorized the transmission.
"(c) An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment form.
"(d) An appointment of a proxy is revocable by the shareholder unless the appointment form or electronic transmission conspicuously states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of:
"(1) A pledgee;
"(2) A person who purchased or agreed to purchase the shares;
"(3) A creditor of the corporation who extended it credit under terms requiring the appointment;
"(4) An employee of the corporation whose employment contract requires the appointment; or
"(5) A party to a voting agreement created under Section 10-2B-7.31.
"(e) The revocation of an appointment or 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 revocation, death, or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment.
"(f) An appointment made irrevocable under subsection (d) is revoked when the interest with which it is coupled is extinguished.
"(g) A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he or she did not know of its existence when he or she acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares.
"(h) Subject to Section 10-2B-7.24 and to any express limitation on the proxy's authority 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.
"(i) Nothing in this section shall be construed as limiting, or extending, authority granted under a durable power of attorney as provided in Section 26-1-2."
Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.