Title 7
Corporations, Associations, and Partnerships
Chapter 1.2
Rhode Island Business Corporation Act
Part 7
Shareholders
R.I. Gen. Laws § 7-1.2-708
§ 7-1.2-708. Voting of shares.
(a) Each outstanding share, regardless of series or class, is entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited, enlarged or denied by the articles of incorporation as permitted by this chapter. 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 majority or other proportion of shares refers to a majority or other proportion of votes entitled to be cast.
(b) Shares held, directly or indirectly, by another corporation if a majority of the shares entitled to vote for the election of directors of the other corporation is held by the corporation, may not be voted at any meeting or counted in determining the total number of outstanding shares at any given time. Nothing contained in these provisions is construed as limiting the right of any corporation to vote shares, including, but not limited to, its own shares, held in a fiduciary capacity.
(c) Every shareholder entitled to vote at a meeting of shareholders or to express consent without a meeting may authorize another person or persons to act for him or her by proxy, executed, in writing, by the shareholder or by his or her duly authorized attorney in fact. No proxy is valid after three (3) years from the date of its execution, unless otherwise provided in the proxy.
(1) Without limiting the manner in which a shareholder may authorize another person or persons to act for him or her as proxy pursuant to subsection (c) of this section, the following constitutes a valid means by which a shareholder may grant that authority:
(i) A shareholder may execute a writing authorizing another person or persons to act for him or her as proxy. Execution may be accomplished by the shareholder or his or her 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, facsimile signature.
(ii) A shareholder may authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission, including internet and telephonic transmissions, to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or an agent authorized by the person who will be the holder of the proxy to receive the transmission, provided that the telegram, cablegram or other means of electronic transmission must either state or be submitted or communicated with information from which it can be determined that the telegram, cablegram or other electronic transmission, including internet and telephonic transmissions, was authorized by the shareholder. If it is determined that the telegrams, cablegrams or other electronic transmissions, including internet and telephonic transmissions, are valid, the inspectors or, if there are no inspectors, the other persons making that determination, shall specify the information upon which they relied.
(2) Any reliable reproduction of the writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that the copy, facsimile telecommunication or other reproduction is a complete reproduction of the entire original writing or transmission.
(3) 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 authorized to tabulate votes before the proxy exercises his or her authority under the appointment.
(d) The articles of incorporation may provide that at each election of directors, or at elections held under specified circumstances, every shareholder entitled to vote at the election has the right to vote, in person or by proxy, the number of shares owned by him or her for as many persons as there are directors to be elected and for whose election he or she has a right to vote, or to cumulate his or her votes by giving one candidate as many votes as the number of directors multiplied by the number of his or her shares equals, or by distributing the votes on the same principle among any number of the candidates.
(e) Shares standing in the name of another corporation, domestic or foreign, may be voted by any officer, agent or proxy that the bylaws of the corporation may prescribe or, in the absence of a provision, as the board of directors of the corporation may determine.
(f) Shares held by an administrator, executor, guardian, custodian under a gift to minors act, conservator or trustee may be voted by him or her, either in person or by proxy, without a transfer of the shares into his or her name.
(g) Shares held by two (2) or more persons as joint tenants or as tenants in common may be voted at any meeting of the shareholders by any one of the persons, unless another joint tenant or tenant in common seeks to vote any of the shares in person or by proxy. In the latter event, the written agreement, if any, which governs the manner in which the shares are voted, controls if presented at the meeting. If there is no agreement presented at the meeting, the majority in number of the joint tenants or tenants in common present control the manner of voting. If there is no majority, or if there are two (2) joint tenants or tenants in common, both of whom seek to vote the shares, the shares, for the purpose of voting, must be divided equally among the joint tenants or tenants in common present.
(h) Shares standing in the name of a receiver may be voted by the receiver, and shares held by or under the control of a receiver may be voted by the receiver without the transfer of those shares into his or her name if authority to do so is contained in an appropriate order of the court by which the receiver was appointed.
(i) A shareholder whose shares are pledged is entitled to vote the shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee is entitled to vote the shares so transferred.
(j) On and after the date on which written notice of redemption of redeemable shares has been mailed to the holders of the shares and a sum sufficient to redeem the shares has been deposited with a bank or trust company with irrevocable instruction and authority to pay the redemption price to the holders of the shares upon surrender of certificates for the shares, the shares are not entitled to vote on any matter and are not deemed to be outstanding shares.
(k) (1) An executed proxy is irrevocable if it specifies 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 coupled with it. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the shares itself or an interest in the corporation generally.
(2) Without limiting the generality of subsection (k)(1) and subject to that subsection, a proxy is coupled with an interest and is irrevocable if it is held by any of the following or a nominee of any of the following:
(i) A pledgee under a valid pledge;
(ii) A person who has agreed to purchase the shares under an executory contract of sale;
(iii) A creditor or creditors of the corporation who extend or continue credit to the corporation in consideration of the proxy if the proxy states that it was given in consideration of the extension or continuation of credit, the amount of the credit, and the name of the person extending or continuing credit; and
(iv) A person who has contracted to perform services for the corporation if a proxy is required by the contract of employment, as part of the consideration for the contract of employment, if the proxy states that it was given in consideration of the contract of employment, the name of the employee, and the period of employment contracted for; provided the proxies are respectively revocable after the pledge is redeemed, or the executory contract of sale is performed, or the debt of the corporation is paid, or the period of employment has terminated.
(3) A provision contained in a proxy making it irrevocable is not enforceable against a purchaser for value of the shares subject to the provision without actual knowledge of the existence of the provision, unless notice of the proxy and its irrevocability appears plainly on the certificate or certificates representing the shares; provided that if such shares are uncertificated, a provision contained in a proxy making it irrevocable is enforceable against a purchaser for value of the shares subject to the provision without actual knowledge of the existence of the provision if, and only if, notice of the proxy and its irrevocability was provided in writing to such purchaser prior to the consummation of the purchase of such shares.
History of Section.
P.L. 2004, ch. 216, § 2; P.L. 2004, ch. 274, § 2; P.L. 2005, ch. 120, § 1; P.L. 2005, ch. 130, § 1.