35-14-148. Action on ratification. (1) The quorum and voting requirements applicable to a ratifying action by the board of directors under 35-14-147(1) are the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time the ratifying action is taken.

(2) If the ratification of the defective corporate action requires approval by the shareholders under 35-14-147(3) and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative shares, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of defective corporate action, provided that notice is not required to be given to holders of valid or putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose or one of the purposes of the meeting is to consider ratification of a defective corporate action and must be accompanied by:

(a) either a copy of the action taken by the board of directors in accordance with 35-14-147(1) or the information required by 35-14-147(1)(a) through (1)(d); and

(b) a statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of the defective corporate action should not be effective or should be effective only on certain conditions must be brought within 120 days from the applicable validation effective time.

(3) Except as provided in subsection (4) with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the shareholders required by 35-14-147(3) must be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of the shareholder approval.

(4) The approval by shareholders to ratify the election of a director requires that the votes cast within the voting group favoring ratification exceed the votes cast opposing ratification of the election at a meeting at which a quorum is present.

(5) Putative shares on the record date for determining the shareholders entitled to vote on any matter submitted to shareholders under 35-14-147(3) (and without giving effect to any ratification of putative shares that becomes effective as a result of the vote) are neither entitled to vote nor counted for quorum purposes in a vote to approve the ratification of a defective corporate action.

(6) If the approval under this section of putative shares would result in an overissue, in addition to the approval required by 35-14-147, approval of an amendment to the articles of incorporation under part 10 of this chapter to increase the number of shares of an authorized class or series or to authorize the creation of a class or series of shares so there would be no overissue is also required.

History: En. Sec. 22, Ch. 271, L. 2019.