Oregon Statutes 60.279 – Quorum; notice to shareholders of proposed ratification
(1) Quorum and voting requirements that applied to the board of directors at the time a corporation took a defective corporate action apply also to the board of directors in taking an action to ratify the defective corporate action.
Terms Used In Oregon Statutes 60.279
- Articles of incorporation: means the articles described in ORS § 60. See Oregon Statutes 60.001
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Person: means an individual or entity. See Oregon Statutes 60.001
- Quorum: The number of legislators that must be present to do business.
- Record date: means the date established under this chapter on which a corporation determines the identity of the corporation's shareholders and their shareholdings for purposes of this chapter. See Oregon Statutes 60.001
- Shareholder: means a person in whose name a share is registered in the records of a corporation or the beneficial owner of a share to the extent of the rights granted by a nominee certificate on file with a corporation. See Oregon Statutes 60.001
(2)(a) Except as provided in paragraph (b) of this subsection, if the shareholders of a corporation must, under ORS § 60.276 (3), approve a ratification of a defective corporate action at a meeting, the corporation shall send notice of the meeting to each person, whether or not the person may vote, that holds valid and putative shares of the corporation on:
(A) The record date for notice of the meeting; and
(B) The date of the defective corporate action.
(b) A corporation need not send notice to a person that holds valid or putative shares if the corporation cannot determine from the corporation’s records the person’s identity or contact information for notice.
(3) A notice under subsection (2) of this section must:
(a) State that the purpose, or one of the purposes, of the meeting is to consider an approval of the ratification of a defective corporate action.
(b) Include a copy of the action the board of directors took in accordance with, or information required under, ORS § 60.276.
(c)(A) Except as provided in subparagraph (B) of this paragraph, state conspicuously the calendar date by which a person that wishes to challenge the ratification must bring an action in a court of this state under ORS § 60.291. The calendar date must be within 120 days after the later of the effective date of validation or the date of the notice.
(B) If at the time that the corporation sends notice under this section the corporation cannot state the calendar date by which a person must bring an action in a court of this state under ORS § 60.291, the notice must:
(i) State the date on which the corporation anticipates that a person must bring an action; or
(ii) State that a person may contact the corporation to determine the exact date by which the person must bring the action and provide the information necessary to contact the corporation.
(4)(a) Except as provided in paragraph (b) of this subsection, if a board of directors’ ratification of a defective corporate action under ORS § 60.276 requires shareholder approval, the quorum and voting requirements that applied to shareholders at the time the shareholders approved the defective corporate action apply also to the shareholders’ approval of the ratification of the defective corporate action.
(b) Shareholder approval of a ratification of an election of a director requires that at a meeting at which a quorum is present the number of votes that shareholders cast that favor the ratification exceeds the number of votes that shareholders cast that oppose the ratification.
(5)(a) Except as provided in paragraph (b) of this subsection, putative shares that exist on the record date for determining the shareholders who may vote to approve a ratification of a defective corporate action, including putative shares that might become valid shares as a result of ratifying the defective corporate action, may not vote or be counted for the purpose of determining a quorum in a vote to approve the ratification of the defective corporate action.
(b) If a corporation has only putative shares outstanding and no valid shares outstanding, all putative shares may vote and be counted for the purpose of determining a quorum in a vote to approve the ratification of a defective corporate action.
(6) If approving an issue of putative shares would result in an overissue, in addition to obtaining the ratification required under ORS § 60.276 and, if necessary, the approval required under subsections (4) and (5) of this section, the corporation shall amend the corporation’s articles of incorporation in accordance with this chapter to increase the number of shares of an authorized class or series, or authorize the creation of a class or series of shares, that is sufficient to prevent the overissue. [2019 c.325 § 5]