Read 1st time January 24, 1996, and 1,000 copies ordered printed.

Read 2nd time January 31, 1996, and referred to the Committee on Judiciary.

Reported from the Committee February 12, 1996, with recommendation that the bill do pass with Senate Committee Amendment No. 1 and be placed on the Consent Calendar.

Senate Committee Amendment No. 1 adopted February 21, 1996.

Taken up February 21, 1996. Read 3rd time and placed upon its final passage; bill passed.

TERRY L. SPIELER, Secretary.

S3162.01P

To repeal section 351.750, RSMo 1994, and sections 351.200, 351.245, 351.250, 351.265, 351.320, 351.478 and 351.482, RSMo Supp. 1995, relating to corporations, and to enact in lieu thereof nine new sections relating to the same subject.

Be it enacted by the General Assembly of the State of Missouri, as follows:

Section A. Section 351.750, RSMo 1994, and sections 351.200, 351.245, 351.250, 351.265, 351.320, 351.478 and 351.482, RSMo Supp. 1995, are repealed and nine new sections enacted in lieu thereof, to be known as sections 351.200, 351.245, 351.250, 351.265, 351.268, 351.320, 351.478, 351.482 and 351.750, to read as follows:

351.200. 1. Any corporation which has issued [preferred] shares of any class of stock may, subject to the provisions of its articles of incorporation, redeem all or any part of such shares if subject to redemption under the provisions of its articles of incorporation, or purchase all or any part of such shares, but in the case of shares subject to redemption at not exceeding the price or prices at which the shares may be redeemed, and may by resolution of its board of directors apply to the redemption or purchase an amount out of its stated capital not exceeding the amount of stated capital represented by the shares so redeemed or purchased whereupon the shares so redeemed or purchased out of stated capital are deemed to be retired; but no such redemption or purchase shall be made out of stated capital unless the assets of the corporation remaining after such redemption or purchase are sufficient to pay any debts of the corporation the payment of which has not been otherwise provided for.

2. Any corporation may also by resolution of its board of directors, subject to the provisions of its articles of incorporation, redeem or purchase all or any part of [its preferred] the shares of any class or series of stock out of surplus, and may at any time by resolution of its board of directors retire any [preferred] shares so redeemed or purchased out of surplus or acquired by the corporation in any other manner not covered by subsection 1 or subsection 3.

3. Whenever any corporation reacquires any of its [preferred] shares of any class or series of stock upon the conversion or exchange of such shares into or for other shares of the corporation, the reacquired [preferred] shares shall be deemed to be retired and the amount of stated capital theretofore represented by the reacquired shares shall automatically be transferred to such other shares to the extent of the aggregate stated capital represented by such other shares. Whenever upon the conversion or exchange of [preferred] shares into or for other shares of the corporation the amount of stated capital represented by the reacquired [preferred] shares exceeds the total aggregate stated capital represented by such other shares, the corporation may at any time thereafter by resolution of its board of directors reduce its stated capital by any amount not exceeding the amount of such excess.

4. Whenever any stated capital is applied to the redemption or purchase of [preferred] shares of any class or series of stock pursuant to subsection 1, any [preferred] shares are retired pursuant to subsection 2, or stated capital is reduced pursuant to subsection 3, a certificate shall be made accordingly, executed in duplicate by the corporation by the president or a vice president, and verified by him, and the corporate seal shall be affixed to, attested by the secretary or an assistant secretary of the corporation, which certificates shall be filed with the secretary of state and otherwise dealt with as in the case of articles of incorporation. Upon such filing, and without the necessity of complying with the provisions or requirements of any other section of this chapter, the stated capital of the corporation shall be reduced by the amount of the stated capital represented by the shares redeemed or purchased [of stated capital] pursuant to subsection 1, or shall be reduced by the amount of the stated capital represented by the shares retired pursuant to subsection 2, or shall be reduced by the amount specified by the resolution of the board of directors adopted pursuant to subsection 3. All shares retired by operation of any of the foregoing subsections shall become authorized and unissued shares of the class to which they belong, unless the reissue thereof is prohibited by the articles of incorporation, in which case the authorized shares of such class shall be reduced to the extent of the shares so retired.

351.245. 1. Unless otherwise provided in the articles of incorporation, each outstanding share entitled to vote under the provisions of the articles of incorporation shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders. If the articles of incorporation provide for more or less than one vote for any share on any matter, every reference in this chapter to a vote by a majority or other proportion of stock shall refer to such majority or other proportion of the votes of such stock.

2. No person shall be admitted to vote on any shares belonging or hypothecated to the corporation which issued the shares.

3. Unless the articles of incorporation or bylaws provide otherwise, each shareholder in electing directors shall have the right to cast as many votes in the aggregate as shall equal the number of votes held by him in the corporation, multiplied by the number of directors to be elected at the election, and each shareholder may cast the whole number of votes, either in person or by proxy, for one candidate, or distribute them among two or more candidates.

4. A shareholder may vote either in person or by proxy [executed in writing by the shareholder or by his duly authorized attorney in fact]. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. Any proxy delivered for or in connection with the shareholder authorization of a control share acquisition pursuant to section 351.407 is valid only if it provides that it is revocable and if it is solicited, appointed, and received both (a) in accordance with all applicable legal requirements and (b) separate and apart from the sale or purchase, contract or tender for sale or purchase, or request or invitation for tender for sale or purchase, of shares of the issuing public corporation. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power of attorney; except that, as provided in this subsection proxies appointed for or in connection with the shareholder authorization of a control share acquisition pursuant to section 351.407 shall be revocable at all times prior to the obtaining of such shareholder authorization, whether or not coupled with an interest. The interest with which it is coupled need not be an interest in the shares themselves.

5. Without limiting the manner in which a shareholder may authorize a person to act for him as proxy pursuant to this section, the following shall constitute a valid means by which a shareholder may grant such authority:

(1) A shareholder or his duly authorized attorney in fact may execute a writing authorizing another person to act for him as proxy. Execution may be accomplished by the shareholder or duly authorized attorney in fact signing such writing or causing his signature to be affixed to such writing by any reasonable means, including but not limited to facsimile signature;

(2) A shareholder may authorize another person to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram, facsimile, or other means of 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 such transmission, provided that any such telegram, cablegram, facsimile, or other means of electronic transmission shall either set forth or be submitted with information from which it can be determined that the telegram, cablegram, facsimile, or other electronic transmission was authorized by the shareholder. If it is determined that such telegrams, cablegrams, facsimiles, or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied.

351.250. The board of directors shall have power to close the transfer books of the corporation for a period not exceeding seventy days preceding the date of any meeting of shareholders or the date of payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of shares shall go into effect; provided, however, that in lieu of closing the stock transfer books, unless prohibited by the bylaws, the board of directors may fix in advance a date, not exceeding seventy days preceding the date of any meeting of shareholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the shareholders entitled to notice of, and to vote at the meeting, and any adjournment or postponement of the meeting, or entitled to receive payment of the dividend, or entitled to the allotment of rights, or entitled to exercise the rights in respect of the change, conversion or exchange of shares. In such case only the shareholders who are shareholders of record on the date of closing the transfer books or on the record date so fixed shall be entitled to notice of, and to vote at, the meeting, and any adjournment or postponement of the meeting, or to receive payment of the dividend, or to receive the allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the date of closing of the transfer books or the record date fixed as mentioned in this section. If the board of directors does not close the transfer books or set a record date for the determination of the shareholders entitled to notice of, and to vote at, a meeting of shareholders, only the shareholders who are shareholders of record at the close of business on the twentieth day preceding the date of the meeting shall be entitled to notice of, and to vote at, the meeting, and any adjournment or postponement of the meeting; except that, if prior to the meeting written waivers of notice of the meeting are signed and delivered to the corporation by all of the shareholders of record at the time the meeting is convened, only the shareholders who are shareholders of record at the time the meeting is convened shall be entitled to vote at the meeting, and any adjournment or postponement of the meeting.

351.265. 1. Unless otherwise provided in the articles of incorporation or bylaws, a majority of the outstanding shares entitled to vote at any meeting, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders; provided, that in no event shall a quorum consist of less than a majority of the outstanding shares entitled to vote, but less than such quorum shall have the right successively to adjourn the meeting [to a specified date not longer than ninety days after such adjournment, and no notice need be given of such adjournment to shareholders not present at the meeting. In all matters every decision of a majority of shares entitled to vote on the subject matter and represented in person or by proxy at a meeting at which a quorum is present shall be valid as an act of the shareholders, unless a larger vote is required by this chapter, the bylaws, or the articles of incorporation] as provided in section 351.268. Shares represented by a proxy which directs that the shares [be voted to] abstain from voting or [to withhold] that a vote be withheld on a matter shall be deemed to be represented at the meeting [as to such matter] for quorum purposes. Shares as to which voting instructions are given as to at least one of the matters to be voted on shall also be deemed to be so represented. If the proxy states how shares will be voted in the absence of instructions by the shareholder, such shares shall be deemed to be represented at the meeting.

2. In all matters, every decision of a majority of shares entitled to vote on the subject matter and represented in person or by proxy at a meeting at which a quorum is present shall be valid as an act of the shareholders, unless a larger vote is required by this chapter, the bylaws, or the articles of incorporation, provided that in the case of cumulative voting in the election of directors under subsection 3 of section 351.245, directors shall be elected by a plurality of the votes of the shares entitled to vote on the election of directors and represented in person or by proxy at a meeting at which a quorum is present. Unless otherwise provided in the articles of incorporation or bylaws, shares represented by a proxy which directs that the shares abstain from voting or that a vote be withheld on a matter shall be deemed to be represented at the meeting as to such matter. Shares represented by a proxy as to which voting instructions are not given as to one or more matters to be voted on shall not be deemed to be represented at the meeting for purposes of the vote as to such matter or matters. A proxy which states how shares will be voted in the absence of instructions by the shareholder as to any matter shall be deemed to give voting instructions as to such matter.

[2.] 3. Any person who represents a falsified proxy pursuant to this section which the person knows is false in any material respect shall be guilty of an infraction.

351.268. 1. In addition to the provisions of sections 351.265 and 351.267 regarding the adjournment of shareholders meetings at which a quorum is not present, unless the bylaws provide to the contrary, a meeting may be otherwise successively adjourned to a specified date no longer than ninety days after such adjournment or to another place. Notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than ninety days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the date and place of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

2. A shareholder s meeting may be successively postponed by resolution of the board of directors, unless otherwise provided in the bylaws, to a specified date up to a date ninety days after such postponement or to another place, provided public notice of such postponement is given prior to the date previously scheduled for such meeting. Such notice shall state the new date and place of such postponed meeting.

3. For purposes of chapter 351, adjournment means a delay in the date, which may also be combined with a change in the place, of a meeting after the meeting has been convened; postponement means a delay in the date, which may be combined with a change in the place, of a meeting before it has been convened, but after the time and place thereof have been set forth in a notice delivered or given to shareholders; and public notice shall be deemed to have been given if a public announcement is made by press release reported by a national news service or in a publicly available document filed with the United States Securities and Exchange Commission.

351.320. Unless otherwise provided in the articles of incorporation or bylaws of the corporation, vacancies on the board and newly created directorships resulting from any increase in the number of directors to constitute the board of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, until the next election of directors by the shareholders of the corporation. However, if shareholders elect directors by class pursuant to section 351.315, a director elected by the board pursuant to this section to fill a vacancy or to a newly created directorship need not be presented for election by shareholders until the class to which he has been so elected by the board is presented for election by the shareholders.

351.478. 1. After dissolution is authorized, a [dissolved] corporation shall dispose of the known claims against it by following the procedure described in this section.

2. The [dissolved] corporation shall notify its known claimants in writing by United States Postal Service of the dissolution at any time after [its effective date] dissolution is authorized. The written notice must:

(1) Describe information that must be included in a claim;

(2) Provide a mailing address where a claim may be sent;

(3) State the deadline, which may not be fewer than one hundred eighty days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and

(4) State that the claim will be barred if not received by the deadline.

3. Other rules of law, including rules on the permissibility of third-party claims, to the contrary notwithstanding, a claim against a corporation dissolved without fraudulent intent is barred:

(1) If a claimant who was given written notice under subsection 2 of this section does not deliver the claim to the [dissolved] corporation by the deadline;

(2) If a claimant whose claim was rejected by the dissolved corporation does not commence proceedings to enforce the claim within ninety days from the effective date of the rejection notice.

4. For purposes of this section, claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

5. For purposes of this section, fraudulent intent shall be established if it is shown that the sole or primary purpose of the authorization for dissolution was to defraud shareholders, creditors or others.

351.482. 1. After dissolution is authorized, a [dissolved] corporation may also publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice.

2. The notice shall:

(1) Be published one time in a newspaper of general circulation in the county where the [dissolved] corporation s principal office, or, if none in this state, its registered office, is or was last located;

(2) Be published one time in a publication of statewide circulation whose audience is primarily persons engaged in the practice of law in this state and which is published not less than four times per year;

(3) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and

(4) State that a claim against the corporation will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice.

3. Other rules of law, including rules on the permissibility of third-party claims, to the contrary notwithstanding, if a corporation dissolved without fraudulent intent publishes notices in accordance with subsection 2 of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the publication date of whichever of the notices was published last:

(1) A claimant who did not receive written notice under section 351.478;

(2) A claimant whose claim was timely sent to the dissolved corporation but not acted on;

(3) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

4. A claim may be enforced under this section only:

(1) Against the dissolved corporation, to the extent of its undistributed assets; or

(2) If the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of his pro rata share of the claim or the corporate assets distributed to him in liquidation, whichever is less, but a shareholder s total liability for all claims under this section may not exceed the total amount of assets distributed to him.

5. For purposes of this section, fraudulent intent shall be established if it is shown that the sole or primary purpose of the authorization for dissolution or the dissolution was to defraud shareholders, creditors or others.

351.750. 1. The provisions of this chapter apply to statutory close corporations to the extent not inconsistent with the provisions of sections 351.750 to 351.865.

2. Sections 351.750 to 351.865 apply to professional corporations organized under chapter 356, RSMo, whose articles of incorporation contain the statement required by subsection 1 of section 351.755, except insofar as chapter 356, RSMo, contains inconsistent provisions.

3. Sections 351.750 to 351.865 do not repeal or modify any statute or rule of law that is or would apply to a corporation that is organized under this chapter or chapter 356, RSMo, and that does not elect to become a statutory close corporation under section 351.755.

4. Sections 351.750 to 351.865 apply to all corporations electing statutory close corporation status as provided in section 351.755 after August 28, 1990, and are controlling in the absence of a valid agreement to the contary.