Section 10A-2-16.02

Inspection of records by shareholders.

(a) A shareholder of a domestic corporation or of a foreign corporation with its principal office within this state is entitled to inspect and copy, during regular business hours at the corporation's principal office, or if its principal office is outside this state, at a reasonable location within this state, specified by the corporation, any of the records of the corporation described in Section 10A-2-16.01(e) if he or she gives the corporation written notice of his or her demand at least five business days before the date on which he or she wishes to inspect and copy.

(b) A shareholder of a domestic corporation or of a foreign corporation with its principal office within this state who shall have been a holder of record of shares for 180 days immediately preceding his or her demand or who is the holder of record of at least five percent of the outstanding shares is entitled to inspect and copy during regular business hours at a reasonable location within this state specified by the corporation, or in the case of accounting records of the corporation, if the records are maintained outside the state and inspection and copying within this state is impracticable, at a reasonable location outside the state specified by the corporation, for any proper purpose, all of its books, papers, records of account, minutes and record of shareholders, if the shareholder gives the corporation written notice of his or her demand, stating the purpose therefor, at least five business days before the date on which he or she wishes to inspect and copy. Provided, however, if a corporation is engaged in the business of banking, its books and records of account and minutes relating to the private financial affairs of borrowers and depositors who are neither officers, directors, or employees of the corporation nor related to or engaged in business with an officer, director, or employee shall not be subject to examination by the shareholder or by his or her agent or attorney in the absence of an order of a court of competent jurisdiction, after inspection of the books and records of account and minutes in camera, that the examination is necessary; and the order shall be subject to review in the Supreme Court of Alabama on writ of mandamus. Provided, further, that if a corporation is engaged in the business of banking, its books and records of account and minutes shall be deemed not to include any reports of examination by state or federal supervisory agencies nor any actions taken nor reports made by the corporation to bank supervisory authorities pursuant thereto.

(c) Any officer or agent who, or a corporation which, without reasonable cause, shall refuse to allow any shareholder, or his or her agent or attorney so to examine and make copies of and extracts from its books, papers, records of account, minutes and record of shareholders, for any proper purpose, shall be liable to the shareholder for a penalty of an amount not to exceed 10 percent of the value of the shares owned by the shareholder, in addition to any other damages or remedy afforded him or her by law. It shall be a defense to an action brought to collect the penalty specified in this section that the person suing therefor within the two years next preceding the demand has sold or offered for sale any list of shareholders of the corporation, or any other corporation or knowingly has aided or abetted any person in procuring any list of shareholders, or improperly has used any information secured through any prior examination of the books, papers, records of account, minutes or record of shareholders, or was not acting in good faith or for a proper purpose in making this demand.

(d) The right of inspection granted by this section may not be abolished or limited by a corporation's articles of incorporation or bylaws.

(e) This section does not affect:

(1) The right of a shareholder to inspect records under Section 10A-2-7.20 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant; or

(2) The power of a court, independently of this chapter, to compel the production of corporate records for examination.

(f) For purposes of this section, "shareholder" includes a beneficial owner whose shares are held in a voting trust or by a nominee on his or her behalf.

(Acts 1994, No. 94-245, p. 343, §1; §10-2B-16.02; amended and renumbered by Act 2009-513, p. 967, §161.)