HOUSE BILL No. 5954 April 23, 2002, Introduced by Reps. Richner, Ehardt, Pappageorge, O'Neil and Meyer and referred to the Committee on Commerce. A bill to amend 1972 PA 284, entitled "Business corporation act," by amending sections 511 and 611 (MCL 450.1511 and 450.1611), section 511 as amended by 1989 PA 121 and section 611 as amended by 1997 PA 118. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 511. (1) The shareholders may remove 1 or more direc- 2 tors with or without cause unless the articles of incorporation 3 provide that directors may be removed only for cause AND EXCEPT 4 THAT, FOR A CORPORATION WHOSE BOARD IS CLASSIFIED AS PROVIDED IN 5 SECTION 506(1), SHAREHOLDERS MAY REMOVE DIRECTORS ONLY FOR CAUSE 6 UNLESS THE ARTICLES OF INCORPORATION ALLOW REMOVAL WITHOUT 7 CAUSE. The votefor removal shall be byOF a majority of 8 shares entitled to vote at an election of directors IS REQUIRED 9 FOR REMOVAL except that the articles may require a higher vote 06143'01 * DAM 2 1 for removal without cause. This sectionshallDOES not 2 invalidate any bylaw adopted beforethe effective date of the3act which added this sentenceOCTOBER 1, 1989 insofar as the 4 bylaw applies to removal without cause. 5 (2) In the case of a corporation having cumulative voting, 6 if less than the entire board is to be removed,no 1 of the7directors mayA DIRECTOR MAY NOT be removed if the votes cast 8 against his or her removalwould beARE sufficient to elect him 9 or her if then cumulatively voted at an election of the entire 10 board of directors, or, if there are classes of directors, at an 11 election of the class of directors of which he or she is a part. 12 (3) If holders of a class or series of stock or of bonds are 13 entitled by the articles to elect 1 or more directors, this sec- 14 tion applies, with respect to removal of a directorsoelected 15 BY THOSE HOLDERS, to the vote of the holders of the outstanding 16 shares of that class or series of stock or the holders of those 17 bonds. 18 Sec. 611. (1) Before the first meeting of the board, the 19 incorporators may amend the articles of incorporation by comply- 20 ing withsubsection (1) ofsection631631(1). 21 (2) Unless the articles of incorporation provide otherwise, 22 the board may adopt 1 or more of the following amendments to the 23 corporation's articles of incorporation without shareholder 24 action: 25 (a) Extend the duration of the corporation if it was incor- 26 porated at a time when limited duration was required by law. 06143'01 * 3 1 (b) Delete the names and addresses of the initial 2 directors. 3 (c) Delete the name and address of the initial resident 4 agent or registered office, if a statement of change is on file 5 with the administrator. 6 (d) Change each issued and unissued authorized share of an 7 outstanding class into a greater number of whole shares if the 8 corporation has only shares of that class outstanding. 9 (e) Change the corporate name by substituting the word 10 "corporation", "incorporated", "company", "limited", or the 11 abbreviation "corp.", "inc.", "co.", or "ltd.", for a similar 12 word or abbreviation in the corporate name, or by adding, delet- 13 ing, or changing a geographical attribution for the corporate 14 name. 15 (f) Any other change expressly permitted by this act to be 16 made without shareholder action. 17 (3)Other amendments of the articles of incorporation,18exceptEXCEPT as PROVIDED IN SUBSECTION (2) OR otherwise pro- 19 vided in this act,shall be approvedAN AMENDMENT TO THE ARTI- 20 CLES OF INCORPORATION REQUIRES ADOPTION by the shareholders as 21 provided in this section. 22 (4) IF A CORPORATION HAS SECURITIES REGISTERED UNDER SECTION 23 12 OF THE SECURITIES EXCHANGE ACT OF 1934, CHAPTER 404, 48 24 STAT. 892, 15 U.S.C. 78l, AN AMENDMENT TO THE ARTICLES OF INCOR- 25 PORATION REQUIRES ADOPTION BY BOTH THE BOARD OF DIRECTORS AND THE 26 SHAREHOLDERS. 06143'01 * 4 1 (5)(4)Notice of a meeting setting forth the proposed 2 amendment or a summary of the changes to be effected by the 3 proposed amendment shall be given to each shareholder of record 4 entitled to vote on the proposed amendment within the time and in 5 the manner provided in this act for giving notice of meetings of 6 shareholders. 7 (6)(5)At the meeting, a vote of shareholders entitled to 8 vote shall be taken on the proposed amendment.TheA proposed 9 amendmentshall beIS adoptedupon receivingIF IT RECEIVES 10 the affirmative vote of a majority of the outstanding shares 11 entitled to vote on the proposed amendment and, in addition, if 12 any class or series of shares is entitled to vote on the proposed 13 amendment as a class, the affirmative vote of a majority of the 14 outstanding shares of eachsuchclass or series ENTITLED TO 15 VOTE. The voting requirements of this section are subject to 16 greater requirements as prescribed by this act for specific 17 amendments,or asmay be provided byREQUIRED IN the arti- 18 cles of incorporation. 19 (7)(6) AnyTHE SHAREHOLDERS MAY ACT ON ANY number of 20 amendmentsmay be acted upon at 1AT A meeting. 21 (8)(7)Upon adoption, a certificate of amendment shall be 22 filed as provided in section 631. 06143'01 * Final page. DAM