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SENATE FLOOR VERSION
February 9, 2021
SENATE BILL NO. 228 By: Montgomery
An Act relating to business entities; amending 18
O.S. 2011, Section 1012, as amended by Section 1,
Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020, Section
1012), which relates to the Oklahoma General
Corporation Act; authorizing electronic transmission
of certain notice; clarifying procedures for certain
consent effective on future date ; establishing
procedures for certain document form, sig nature and
delivery; authorizing certain electronic
transactions; providing exceptions; clarifying
applicability of provisions; amending 18 O.S. 2011,
Sections 1032, 1033, as amended by Sectio n 7, Chapter
323, O.S.L. 2017, 1038, Section 9, Chapter 323,
O.S.L. 2017, 1064, as amended by Section 14, Chapter
323, O.S.L. 2017, 1069, 1073, as amended by Section
19, Chapter 323, O.S.L. 2017, 1075.2, as amended by
Section 14, Chapter 88, O.S.L. 2019, 1081, as amended
by Section 22, Chapter 323, O.S.L. 2017, 1082, as
amended by Section 23, Chapt er 323, O.S.L. 2017,
Section 24, Chapter 323, O.S.L. 2017, 1090.3, as
amended by Section 25, Chapter 323, O.S.L. 2017,
1090.4, as amended by Section 23, Chapter 88, O.S.L.
2019, 1090.5, as amended by Section 24, Cha pter 88,
O.S.L. 2019 and 1091, as amended by Section 26,
Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Sections 1033, 1055.1, 1064, 1073, 1075.2, 1081,
1082, 1083.1, 1090.3, 1090.4, 1090.5 and 1091), which
relate to the Oklahoma General Corporation Act;
authorizing electronic transmission of cert ain
notice; modifying procedures for issuance of capital
stock; establishing minimum amount of considera tion
for issuance of shares; authorizing stock price to be
fixed by certain formula; conforming language;
modifying requirements for certain ratifica tion vote;
modifying definitions; requiring corporation to
prepare list of certain shareholders within s pecified
time period; defining term; specifying functions of
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certain ledger; expanding methods of delivery of
consents given by el ectronic transmission; mo difying
definition; clarifying usage of certain terms;
conforming language; adding information required for
inclusion in certain agreements; permitting mergers
and consolidations under certain c ircumstances;
clarifying effective date of amendments to
certificates of incorporation; conformin g appraisal
rights to certain mergers; amending 18 O.S. 2011,
Sections 2001, as amended by Section 37, Chapter 323,
O.S.L. 2017, 2010, 2016, 2054.1, as amended by
Section 52, Chapter 323, O.S.L. 2017 , 2054.2, as
amended by Section 53, Chapter 323, O.S.L. 2017 (18
O.S. Supp. 2020, Sections 2001, 2054.1 and 2054.2),
which relate to the Oklahoma Limited Liability
Company Act; modifying definitions; clarifying
entities that may act as registered agents;
authorizing delegation of certain manager duties;
authorizing conversi on of certain entities; creating
the Oklahoma Public Benefit Limited Liability Company
Act; providing short title; defining terms;
establishing requirements and procedures for
formation and operation of public benefit limited
liability companies; establish ing rights and duties
of managers and members of certain companies;
requiring reporting of certain activities;
authorizing derivative lawsuit to enforce certain
requirements; clarifying applicability of provis ions;
construing provisions; amending 54 O.S. 2011, Section
500-114A, which relates t o the Uniform Limited
Partnership Act; clarifying entities that may act as
registered agents; updating statutory references;
providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 18 O.S. 2011, Section 1012, as
amended by Section 1, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1012), is amended to read as follows:
Section 1012.
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ORGANIZATION MEETING OF INCORPORATORS OR DIRECTORS NAMED IN
CERTIFICATE OF INCORPORATION
A. After the filing of the certificate of incorp oration, an
organization meeting of the incorporator or incorporators, or of the
board of directors if the initial directors were nam ed in the
certificate of incorporation, shall be held either within or without
this state at the call of a majority of the incorporators or
directors, as the case may be, for the purposes of adopting bylaws,
electing directors if the meeting is of the inco rporators, to serve
or hold office until the first annual meeting of shareholders or
until their successors are elected and qualify, electing officers if
the meeting is of the directors, doing any oth er or further acts to
perfect the organization of the co rporation, and transacting such
other business as may come before the meeting.
B. The persons calling the meeting shall gi ve to each other
incorporator or director, as the case may be, at least two ( 2) days’
written notice thereof in writing or by electro nic transmission by
any usual means of commun ication, which notice shall state the time,
place and purposes of the meeting as fixed by the person s calling
it. Notice of the meetin g need not be given to anyone who attends
the meeting or who signs a waiver of notice either before or after
the meeting.
C. Any action permitted to be taken at the organization meeting
of the incorporators or directors, as the case may be, may be taken
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without a meeting if each incorporator or director, where there is
more than one, or the sole incorporator or director whe re there is
only one, signs an instrument which states the action so taken
consents thereto in writi ng or by electronic transmission. Any
person whether or not then an incorporator or director may provide,
whether through instruction to an agent or otherw ise, that a consent
to action will be effective at a future time including a time
determined upon the happening of an event, no later than sixty (6 0)
days after such instruction is given or such provision is ma de and
such consent shall be deeme d to have been given for purposes of this
subsection at such effective time so long as such person is then an
incorporator or director, as the case may be, and did no t revoke the
consent prior to such time. Any such conse nt shall be revocable
prior to its becoming e ffective.
D. If any incorporator is not available to act, then any person
for whom or on whose beha lf the incorporator was acting directly or
indirectly as employee or agent may take any action that such
incorporator would have been authorized to take und er this section
or Section 1011 of this title; provided, that any instrument signed
by such other person, or any record of the proceedings of a meeting
in which such person participated, shall state that such
incorporator is not available and the reason th erefor, that such
incorporator was acting directly or indirectly as employee or agent
for or on behalf of such person, and that such person ’s signature on
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such instrument or participation in such meeting is othe rwise
authorized and not wrongful.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1014.3 of Title 18, unless there
is created a duplication i n numbering, reads as follows:
DOCUMENT FORM, SIGNATURE AND DELIVERY
A. Except as provided in subsection B of this section, without
limiting the manner in which any act or transaction may be
documented, or the manner in which a document may be s igned or
delivered:
1. Any act or transaction contempla ted or governed by this
title or the certific ate of incorporation or bylaws may be provided
for in a document, and an electronic transmission shall be deemed the
equivalent of a written document. “Document” means (i) any tangible
medium on which information is inscribed, and includes handwritten,
typed, printed or similar instruments, and copies of such
instruments and (ii) a n electronic transmission;
2. Whenever this act or the certificate of incorporation o r
bylaws requires or permits a signature, the signature may be a
manual, facsimile, conformed or electronic signature. “Electronic
signature” means an electronic symbol or process that is attached to,
or logically associated with, a document and executed or adopted by
a person with an intent to authen ticate or adopt the document; and
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3. Unless otherwise agreed between the sender and recipient, an
electronic transmission shall be deemed delivered to a person for
purposes of this title and the certificate o f incorporation and
bylaws when it enters an information processing system that the
person has designated for the purpose of receiving electronic
transmissions of the type delivered, so long as the electronic
transmission is in a form capable of being proc essed by that system
and such person is able to retrieve the electronic transmission.
Whether a person has so designated an information processing system
is determined by the certificate of incorporation, the bylaws or from
the context and surrounding circumstances including the parties’
conduct. An electronic transmission is delivered under th is section
even if no person is aware of its receipt. Receipt of an electron ic
acknowledgement from an information processing system establishes
that an electronic transmission was received but, by itself, doe s
not establish that the content sent corresponds to the content
received.
This act shall not prohibit one or more persons from conducting a
transaction in accordance with the Uniform Electronic Transaction Act
so long as the part or parts of the transacti on that are governed by
this act are documented, signed and delivered in accordance with this
subsection or otherwise in accordance with this act. This subsection
shall apply solely for purposes of determining whether an act or
transaction has been docume nted, and the document has been signed and
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delivered, in accordance with this act, the certificate of
incorporation and the bylaws.
B. Subsection A of this section shall not apply to:
1. A document filed with or submitted to the Secretary of State
or a court or other judicial or governmental body of this state;
2. A document comprising part of the stock ledger;
3. A certificate representing a security;
4. Any document expressly referenced as a notice or waiver of
notice by this act, the certificate of incorporation or bylaws;
5. A consent in lieu of a meeting given by a director,
shareholder or incorporator;
6. A ballot to vote on actions at a m eeting of shareholders;
and
7. An act or transaction effected pursuant to Section 1100.1 of
Title 18 of the Oklahoma Statutes.
The provisions of this subsection shall not create any
presumption about the lawful means to document a matter addressed by
this subsection, or the lawful means to sign or deliver a document
addressed by this subsection. A provision of the certificate of
incorporation or bylaws shall not limit the application of subsection
A of this section unless the provision expressly restricts one or
more of the means of documenting an act or transaction, or of signing
or delivering a document, perm itted by subsection A of this section.
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C. In the event that any provision of this act is deemed to
modify, limit or supersede the Electronic Signatures in Global and
National Commerce Act, 15 U.S.C. Sections 7001 et. seq., the
provisions of this act shall control to the fullest extent permitted
by Section 7002(a)(2) of such act.
SECTION 3. AMENDATORY 18 O.S. 2011, Section 1032, is
amended to read as follows:
Section 1032.
CLASSES AND SERIES OF STOCK; RIGHTS, ETC.
A. Every corporation may issue one or more classes of stock or
one or more series of stock within any class thereof, any or all of
which classes may be of stock with par value or stock without par
value and which classes or ser ies may have voting powers, full or
limited, or no voting powers, and designations, preferences and
relative, participating, optional, or other special rights, and
qualifications, limitations, or restrictions thereof, as shall be
stated and expressed in th e certificate of incorporation or of a ny
amendment thereto, or in the resolution or resolutions providing for
the issue of the stock adopted by the board of dir ectors pursuant to
authority expressly vested in it by the provisions of its
certificate of incorporation. Any of the voting powers,
designations, preferences, rights, and qualifications, limitations
or restrictions of any class or series of stock may be made
dependent upon facts ascertainable outside the certificate of
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incorporation or of any amend ment thereto, or outside the resolutio n
or resolutions providing for the issue of the stock adopted by the
board of directors pursuant to authority expressly ve sted in it by
the provisions of its certificate of incorporation; provided, that
the manner in which the facts shall operate upon the voting powers,
designations, preferences, rights, and qualifications, limitations,
or restrictions of the class or series of stock is clearly and
expressly set forth in the certificate of incorporation or in the
resolution or resolutions providing for the issue of the stock
adopted by the board of directors. The power to increase or
decrease or otherwise adjust the capital s tock as provided for in
the Oklahoma General Corporation Act shall apply to all or any such
classes of stock. The term “facts”, as used in this subsection,
includes, but is not limited to, the occurrence of any event,
including a determination or action b y any person or body, including
the corporation.
B. Any stock of any class or series may be mad e subject to
redemption by the corpora tion at its option or at the option of the
holders of the stock or upon the happening of a specified event;
provided, however, immediately following any redemption, the
corporation shall have outstanding one or more sha res or one or more
classes or series of stock, which share, or shares together, shall
have full voting powers. Notwithstanding the limitation stated in
the foregoing proviso:
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1. Any stock of a regulated investment company registered under
the Investment Company Act of 1940, as heretofore or hereafter
amended, may be made subject to redemption by the corporation at its
option or at the option of the holders of t he stock.
2. Any stock of a corporation which directly or indirectly
holds a license or franchi se from a governmental agency to condu ct
its business or is a member of a national securities exchange, which
license, franchise, or membership is conditioned u pon some or all of
the holders of its stock possessing prescribed qualifications, may
be made subject to redemption by the corporation to the extent
necessary to prevent the loss of the license, franchise, or
membership or to reinstate it. Any stock which may be made
redeemable under this section may be redeemed for cash, property , or
rights, including securities of the same or another corporation, at
such time or times, price or prices, or rate or rates, and with any
adjustments, as shall be stated in the certificate of incorporation
or in the resolution or resolutions providing for the issue of the
stock adopted by the board of directo rs as provided for in
subsection A of this section.
C. The holders of preferred or special stock of any class or of
any series thereof shall be entitled to receive dividends at such
rates, conditions, and times as shall be stated in the certificate
of incorporation or in the resolution or resolutions providing for
the issue of the stock adopted by the board of directors as p rovided
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for in subsection A of this section, payable in preference to, or in
relation to, the dividends payable on any other class or classes or
of any other series of stock, and cumulative or noncumulative as
shall be so stated and expressed. When divide nds upon the preferred
and special stocks, if any, to the extent of the preference to which
the stocks are entitled, shall have been p aid or declared and set
apart for payment, a dividend on the remaining class or classes or
series of stock may then be pai d out of the remaining assets of the
corporation available for dividends as otherwise provided f or in the
Oklahoma General Corporation Act.
D. The holders of the preferred or special stock of any class
or of any series thereof shall be entitled to the rig hts upon the
dissolution of, or upon any distribution of the assets of, the
corporation as shall be stated in the certificate of incor poration
or in the resolution or resolutions providing for the issue of the
stock adopted by the board of directors as pro vided for in
subsection A of this section.
E. Any stock of any class or of any series thereof m ay be made
convertible into, or exchan geable for, at the option of either the
holder or the corporation or upon the happening of a specified
event, shares of any other class or classes or any other series of
the same or any other class or classes of stock of the corporation,
at the price or prices or at the rate or rates of exchange, and with
adjustments as shall be stated in the certificate of incorporation
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or in the resolution or resolutions providing for the issue of the
stock adopted by the board of dir ectors as provided for in
subsection A of this section.
F. If any corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the powers,
designations, preferences, and relative, participating, optional , or
other special rights of each class of stock or series thereof and
the qualifications, limitations, or restrictions of such preferences
or rights shall be set fo rth in full or summarized on the face or
back of the certificate which the corporation shall iss ue to
represent the class or series of stock; provided that, except as
otherwise provided for in Section 1055 of this title, in lieu of the
foregoing requiremen ts, there may be set forth on the face or back
of the certificate which the corporation shall is sue to represent
the class or series o f stock, a statement that the corporation will
furnish without charge to each shareholder who so requests the
powers, designations, preferences, and relative, participating,
optional, or other special rights of each cl ass of stock or series
thereof and the qualifications, limitations, or restrictions of the
preferences or rights. Within a reasonable time after the issuance
or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice, in writing or by
electronic transmission, containing the information required to be
set forth or stated on certificates pursuant to this sectio n or
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Section 1037, subsection A of Sectio n 1055 or subsection A of
Section 1063 of this title, o r with respect to this section a
statement that the corporation will furnish without charge to each
shareholder who so requests the powers, designations, prefer ences,
and relative, participating, optio nal, or other special rights o f
each class of stock or series thereof and the qualifications,
limitations, or restrictions of the preferences or rights. Except
as otherwise expressly provided by law, the rights and obligations
of the holders of uncertific ated stock and the rights and
obligations of the holder of certificates representing stock of the
same class and series shall be identical.
G. 1. When any corporation desires to issue any shares of
stock of any class or of any series of any class of whic h the
powers, designations, pr eferences, and relative, participating,
optional, or other rights, if any, or the qualifications,
limitations, or restrictions thereof, if any, shall not have been
set forth in the cert ificate of incorporation or in any amendm ent
thereto but shall be provi ded for in a resolution o r resolutions
adopted by the board of directo rs pursuant to authority expressly
vested in it by the provisions of the certificate of incorporation
or any amendment thereto, a certificate of designation s setting
forth a copy of the resolution or resolutions and the number of
shares of stock of the cla ss or series to which the resolution or
resolutions apply shall be executed, acknowledged, and filed, and
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shall become effective, in accordance with the pro visions of Section
1007 of this title. Unless otherwis e provided in any resolution or
resolutions, the number of shares of stock of any series to which
the resolution or resolutions apply may be increased, but not above
the total number of authorized shar es of the class, or decreased,
but not below the number of shares thereof then outstanding, by a
certificate likewise executed, acknowledged, and filed setting forth
a statement that a specified increase or decrease therein had been
authorized and directed by a resolution or resolution s likewise
adopted by the board of directors. In case the number of t he shares
shall be decreased, the number of shares so specified in the
certificate shall resume the status which th ey had prior to the
adoption of the first resolution or resolutions. U nless otherwise
provided in the certificate of incorporation, if no sh ares of stock
have been issued of a class or series of stock established by a
resolution of the board of directors, the voting powers,
designations, prefere nces, and relative, participat ing, optional, or
other rights, if any, or the qualifications, limitat ions, or
restrictions thereof, may be amended by a resolution or resolutions
adopted by the board of directors. A certificate which states that
no shares of the class or series have bee n issued, sets forth a co py
of the resolution or resolutions, and, if the designation of the
class or series is being changed, indicates the original designation
and the new designation , shall be executed, acknowledged , and filed,
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and shall become effectiv e, in accordance with the provisions of
Section 1007 of this title. W hen no shares of any class or series
are outstanding, either because none were issued or because no
issued shares of any class or series remain outstanding, a
certificate setting forth a resolution or resolution s adopted by the
board of directors that none of the authorized shares of the class
or series are outstanding, and that none will be issued subject to
the certificate of designations previously filed w ith respect to the
class or series, may be executed, ac knowledged, and filed in
accordance with the provisions of Section 1007 of this title and,
when the certificate becomes effective, it shall have the effect of
eliminating from the certificate of incorp oration all matters set
forth in the certificate of des ignations with respect to the class
or series of stock.
2. When any certificate filed pursuant to the provisions of
this subsection becomes effective, it shall have the effect of
amending the certific ate of incorporation; except t hat neither the
filing of the certificate nor the filing of a restated certificate
of incorporation pursuant to Section 1080 of this title shall
prohibit the board of directors from sub sequently adopting
resolutions as authori zed by this subsection.
SECTION 4. AMENDATORY 18 O.S. 2011, Section 1033, as
amended by Section 7, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1033), is amended to read as follows:
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Section 1033.
ISSUANCE OF STOCK, LAWFUL CONSIDERATION - FULLY PAID STOCK
A. The consideration, as determined pursuant to the provisio ns
of subsections A and B of Section 1034 of this title, for
subscriptions to, or the purchase of, the capital stock to be issued
by a corporation shall be paid in such form and in such manner as
the board of directors shall determine. The board of direct ors may
authorize capital stock to be issued for consideration consisting of
cash, any tangible or intangible property or any benefit to the
corporation, or any combination thereof, except for service s to be
performed. The resolution authorizing the issuance o f capital stock
may provide that any stock to be issued pursuant to such resolution
may be issued in one or more t ransactions in such numbers and at
such times as are set forth in or determined by or in the manner set
forth in the resolution, which may inc lude a determination or action
by any person or body including the corporation, provided the
resolution fixes a m aximum number of shares that may be issued
pursuant to such resolution, a time per iod during which such shares
may be issued and a minimum amount of consideration for which such
shares may be issued. The board of directors may determine the
amount of such consideration for which shares may be issued by
setting a minimum amount of consi deration or by approving a formula
by which the amount of consideration is determined. The formula may
include or be made dependent upon facts ascertainable outside the
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formula, provided the manner in which such facts shall operate upon
the formula is clearly and expressly set forth in the formula or in
the resolution approving the formula. In the absence of actual
fraud in the transaction, the judgment of the directors as t o the
value of such consideration shall be conclusive. The c apital stock
so issued shall be deemed to be fully paid and nonassessable stock
upon receipt by the corporation of the authorized consideration.
B. The provisions of subsection A of this section shall not be
construed to prevent the board of directors fro m issuing partly paid
shares in accordance with the provisions of Section 1037 of this
title.
SECTION 5. AMENDATORY 18 O.S. 2011, Section 1038, is
amended to read as fol lows:
Section 1038.
RIGHTS AND OPTIONS RESPECTING STOCK
A. Subject to any provisions in the certificate of
incorporation, every corporation m ay create and issue, whether or
not in connection with the issue and sale of any shares of stock or
other securities of the corporation, rights or options entitling the
holders thereof to acquire from the c orporation any shares of its
capital stock of any class or classes, such rights or options to be
evidenced by or in such instrument or instruments as shall be
approved by the board of directors.
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B. The terms upon which, including the time or times, which may
be limited or unlimited in duration, at or wit hin which, and the
consideration, including any formula by which such consideration may
be determined, for which any such shares may be acquired from the
corporation upon the exercise of any such right or o ption, shall be
such as shall be stated in the cer tificate of incorporation, or in a
resolution adopted by the board of directors providing for the
creation and issue of such rights or options, and, in every case,
shall be set forth or incorporated by refe rence in the instrument or
instruments evidencing such rights or options. A formula by which
such consideration may be determined may include or be made
dependent upon facts ascertainable outside the formula, provided the
manner in which such facts shall operat e upon the formula is clearly
and expressly set forth in the formula or in the resolution
approving the formula. In the absence of actual fraud in the
transaction, the judgment of the directors as to the consideration
for the issuance of such rights or op tions and the sufficiency
thereof shall be conclusive.
C. The board of directors may, by a resolution adopted by the
board, authorize one or more officers o f the corporation to do one
or both of the following:
1. Designate officers and employees of the c orporation or of
any of its subsidiarie s to be recipients of such rights or options
created by the corporation; and
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2. Determine the number of such rights o r options to be
received by such officers and employees;
provided, however, that the resolution so authorizing such
officer or officers sh all specify the total number of rights or
options such officer or officers may so award. The board of
directors may not authorize an officer to designate himself or
herself as a recipient of any such rights or option s.
D. In case the shares of stock of t he corporation to be issued
upon the exercise of such rights or options shall be shares having a
par value, the consid eration so to be received therefor shall have a
value not less than the par value thereof. In case the shares of
stock so to be issued sh all be shares of stock without par value,
the consideration therefor shall be determined in the manner
provided for in Section 1034 of this title.
SECTION 6. AMENDATORY Section 9, Chapter 323, O.S.L.
2017 (18 O.S. Supp. 2020, Section 1055.1), is amended to read as
follows:
Section 1055.1.
RATIFICATION OF DEFECTIVE CORPORATE ACTS AND STOCK
A. Subject to subsection F of this section, no defective
corporate act or putative stock shall be void or voidable solely as
a result of a failure of authorization if ratified as provided in
this section or validated by the District Court in a proceeding
brought under Section 10 of this act 1055.2 of this title.
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B. 1. In order to ratify one or more defectiv e corporate acts
pursuant to this section, other than the ratification of an election
of the initial board of directors pursuant to paragraph 2 of this
subsection, the board of directors of the corporation sh all adopt
resolutions stating:
a. the defective corporate act or acts to be ratified,
b. the date of each defective corporate act or acts,
c. if such defective corporate act or acts involved the
issuance of shares of putative stock, the number and
type of shares of putative stock issued and the date
or dates upon which such putative shares were
purported to have been issued,
d. the nature of the failure of authorization in respect
of each defective corporate act to be ratified, and
e. that the board of dire ctors approves the ratification
of the defective corporate act or acts.
The resolutions may also provide that, at any time before the
validation effective time for the defective act or acts,
notwithstanding approval of the ratification by shareholders, the
board of directors may abandon the ratification without further
action of the shareholders. The quorum and voting requirements
applicable to the ratification by the board of directors shall be
the quorum and voting requirements applicable at the time to the
type of defective corporate act proposed to be ratified when the
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board adopts the resolu tions ratifying the defective corporate act;
provided, that if the certificate of incorporation or bylaws of the
corporation, any plan or agreement to which the cor poration was a
party or any provision of Title 18 of the Oklahoma Statutes this
title, in each case as in effect as of the time of the defective
corporate act, would have required a larger number or portion of
directors or of specified direct ors for a quorum to be pr esent or to
approve the defective cor porate act, such larger number or portion
of such directors or such specified directors shall be required for
a quorum to be present or to a dopt the ratifying resolutions, as
applicable, except that the presence or appr oval of any director
elected, appointed or nominated by holders of any class or s eries of
which no shares are then outstanding, or by any person that is no
longer a shareholder, shall not be required.
2. To ratify a defective corp orate act in respect of t he
election of the initial board of d irectors of the corporation, a
majority of the persons who, at the time the resolutions required by
this paragraph are adopted, are exercisi ng the powers of directors
under claim and color of an election or appointment as such may
adopt resolutions stating :
a. the name of the person or persons who f irst took
action in the name of the corporation as the initial
board of directors of the corpora tion,
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b. the earlier of the date on which such persons first
took such action or were purported to have been
elected as the initial board of directors, and
c. that the ratification of the election of such person
or persons as the initial board of directors is
approved.
C. Each defective corporate act ratifie d pursuant to paragraph
1 of subsection B of this section shal l be submitted to shareholders
for approval as provided in subsection D of this section, unless:
(1) no
1. a. No other provision of Title 18 of the Oklahoma
Statutes this title, and no provision of the
certificate of incorporation or bylaws of the
corporation, or of any plan or agreement to which t he
corporation is a party, would have required
shareholder approval of the defective corporate act to
be ratified, either at the time of the defective
corporate act or at t he time the board of directors
adopts the resolutions ratifying the defective
corporate act pursuant to paragraph 1 of subsection B
of this section, and (2) the.
b. The defective corporate act did not result from a
failure to comply with Section 1090.3 of Title 18 of
the Oklahoma Statutes this title; or
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2. As of the record date for deter mining the shareholders
entitle to vote on the ratification of the defective corporate act,
there are no shares of valid stock outstanding and entitled to vote
thereon, regardless of whether there then exist any shares of
putative stock.
D. If ratification of a defective corporate act is required to
be submitted to shareholders for approval pursuant to subsection C
of this section, due notice of the time, pla ce, if any, and purpose
of the meeting shall be given at least twenty (20) days before the
date of the meeting to each holder of valid stock and putative
stock, whether voting or nonvoting, at the address of such holder as
it appears or most recently appea red, as appropriate, on the records
of the corporation. The notice shall also be given to the hold ers
of record of valid stock and putative stock, whether voting or
nonvoting, as of the time of the defec tive corporate act, other than
or, in the case of any defective corporate act that inv olved the
establishment of a record date for notice of or voting at any
meeting of shareholders, for action by written consent of
shareholders in lieu of a meeting, or fo r any other purpose, as of
the record date for notice of or voting at such meeting, the record
date for action by written consent, or the record date f or such
other action, as the case may be, except that no notice need be
given to holders whose identit ies or addresses cannot be determined
from the records of the corporation. The notice shall contain a
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copy of the resolutions adopted by the board of dir ectors pursuant
to paragraph 1 of subsection B of this section or the information
required by paragrap hs a through e of paragraph 1 of subsection B of
this section and a statement that any claim that the defectiv e
corporate act or putative stock ratified h ereunder is void or
voidable due to the failure of authorization, or that the District
Court should declare in its discretion that a ratification in
accordance with this section not be effective or be effective o nly
on certain conditions must be brought wi thin one hundred twenty
(120) days from the validation effective time. At such meeting the
quorum and voting requirements applicable to the ratification of
such defective corporate act shall be the quorum and vo ting
requirements applicable to the type of defective corporate act
proposed to be ratified at the time of the approval of the
ratification, except that:
1. If the certificate of incorporation or byl aws of the
corporation, any plan or agreement to which t he corporation was a
party or any provision of this title in effect as of the time of the
defective corporate act would have required a larger num ber or
portion of stock or of any class or series ther eof or of specified
shareholders for a quorum to be pres ent or to approve the defective
corporate act, the presence or approval of such larger number or
portion of stock or of such class or series there of or of such
specified shareholders shall be required for a quorum to be prese nt
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or to approve the ratificati on of the defective corporate act, as
applicable, except that the presence or approval of shares of any
class or series of which no shares are the n outstanding, or of any
person that is no longer a sh areholder, shall not be r equired;
2. The approval by shareholders of the ratification of the
election of a director shall require the affirmative vote of the
majority of shares present at the meeting a nd entitled to vote on
the election of such director, except that if the certif icate of
incorporation or bylaw s of the corporation then in effect or in
effect at the time of the defective election require or required a
larger number or portion of stock or of any class or series thereof
or of specified shareho lders to elect such director, the affirmative
vote of such larger number or portion of stock or of any class or
series thereof or of specified shareholders shall be required to
ratify the election of su ch director, except that the presence or
approval of shares of any class or ser ies of which no shares are
then outstanding, or of any person that is no lo nger a shareholder,
shall not be required; and
3. In the event of a failure of authorization resultin g from
failure to comply with the provisions of Sectio n 1090.3 of Title 18
of the Oklahoma Statutes this title, the ratification of the
defective corporate act shall require the vote set forth in
paragraph 3 of subsection A of Section 1090.3 of Title 18 of the
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Oklahoma Statutes this title, regardless of whether such vote would
have otherwise been required .
Shares of putative stock on the record date for det ermining
shareholders entitled to vote on any matter submitted to
shareholders pursuant to subsection C o f this section, and without
giving effect to any ratification that become s effective after such
record date, shall neither be entitled to vote nor coun ted for
quorum purposes in any vote to ratify any defective corporate act.
E. If a defective corporate a ct ratified pursuant to this
section would have required under any other section of Title 18 of
the Oklahoma Statutes this title the filing of a certif icate in
accordance with Section 1007 of Title 18 of the Oklahoma Statutes
this title, then, whether or n ot a certificate was previously filed
in respect of such defective corporate act and in lieu of filing the
certificate otherwise required by Title 18 of the Oklahoma Statutes
this title, the corporation shall file a certificate of validation
with respect to such defective corporate act in accordance with
Section 1007 of Title 18 of the Oklahoma Statutes this title. A
separate certificate of validation shall be required for each
defective corporate act requiring the filing of a certificate of
validation under this section, except that (i) two or more defective
corporate acts may be included in a single certifica te of validation
if the corporation filed, or to comply with Title 18 of the Oklahoma
Statutes this title would have filed, a single certificate und er
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another provision of Title 18 of the Oklahoma Statutes this title to
effect such acts, and (ii) two or mo re overissues of shares of any
class, classes or series of stock may be included in a single
certificate of validation, provided that the increase in the number
of authorized shares of each such class or series set forth in the
certificate of validation sh all be effective as of the date of the
first such overissue. The certificate of validation shall set
forth:
1. Each defective corporate act that is the subject of the
certificate of validation , including, in the case of any defectiv e
corporate act involv ing the issuance of shares of putative stock,
the number and type of shares of putative stock issued and the date
or dates upon which such putative s hares were purported to have been
issued, the date of such defective corporate act , and the nature of
the failure of authorization in respect of such defective corporate
act;
2. A statement that such defective corporate act was ratified
in accordance with this section, including the date on which the
board of directors ratified such defec tive corporate act and the
date, if any, on which the shareholders approved the ratification of
such defective corporate act; and
3. The information required by one of th e following paragraphs:
a. if a certificate was previously filed under Section
1007 of Title 18 of the Okla homa Statutes this title
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in respect of such defective corporate act and no
changes to such certificate are required to give
effect to such defective corporate act in accordance
with this section, the certificate of validation shall
set forth (1) the name, title and filing date of the
certificate previously filed and of any certificate of
correction thereto and (2) a statement that a copy of
the certificate previously filed, together with any
certificate of correction thereto, is attached as an
exhibit to the certificate of validation,
b. if a certificate was previously filed under Section
1007 of Title 18 of the Oklahoma Statutes this title
in respect of the defective corporate act and such
certificate requires any change to give effect to the
defective corporate act in accordance with this
section, including a change to the date and time of
the effectiveness of such certificate, the certificate
of validation shall set forth (1) the name, title and
filing date of the certificate so previously filed and
of any certificate of correction thereto, (2) a
statement that a certificate containing all of the
information required to be included under the
applicable section or sections of Title 18 of the
Oklahoma Statutes this title to give effect to the
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defective corporate act is attached as an exhibit to
the certificate of validation, and (3) the date and
time that such certificate shall be deemed to have
become effective pursuant to this section, or
c. if a certificate was not previously filed under
Section 1007 of Title 18 of the Oklahoma Statutes this
title in respect of the defective corporate act and
the defective corporate act ratified pursuant to this
section would have required under any other section of
Title 18 of the Oklahoma Statutes this title the
filing of a certificate in accordance with Section
1007 of Title 18 of the Oklahoma Statutes this title,
the certificate of validation shall set forth (1) a
statement that a certificate containing all of the
information required to be included under the
applicable section or sections of Title 18 of the
Oklahoma Statutes this title to give effect to the
defective corporate act is attached as an exhibit to
the certificate of validation, and (2) the date and
time that such certificate shall be deemed to have
become effective pursuant to this section.
A certificate attached to a certificate of validation pursuant
to subparagraph b or c of paragraph 3 of this subsection need not be
separately executed and acknowledged and need not include any
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statement required by any othe r section of Title 18 of the Oklahoma
Statutes this title that such instrument has been approved and
adopted in accordance with the provisions of such other section.
F. From and after the validation effective time, unless
otherwise determined in an action brought pursuant to Section 10 of
this act 1055.2 of this title:
1. Subject to the last sentence of subsection D of this
section, each defective corporate act ratified in accordance with
this section shall no longer be deemed void or voidable as a result
of the failure of authorization described in the adopted resolutions
and such effect shall be retroactive to the time of the defective
corporate act; and
2. Subject to the last sentence of subsection D of this
section, each share or fraction of a share o f putative stock issued
or purportedly issue d pursuant to any such defective corporate act
shall no longer be deemed void or voidable and shall be deemed to be
an identical share or fraction of a share of outstanding stock as of
the time it was purportedly issued.
G. In respect of each defective co rporate act ratified by the
board of directors pursuant to subsection B of this section, prompt
notice of the ratification shall be given to all holders of valid
stock and putative stock, whether voting or nonvot ing, as of the
date the board of directors a dopts the resolutions approving such
defective corporate act, or as of a date within sixty (60) days
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after the date of adoption, as established by the board of
directors, at the address of such holder as it appea rs or most
recently appeared, as appropriate , on the records of the
corporation. The notice shall also be given to the holders of
record of valid stock and putative stock, whether voting or
nonvoting, as of the time of the defective corporate act, other t han
holders whose identities or addresses ca nnot be determined from the
records of the corporation. The notice shall contain a copy of the
resolutions adopted pursuant to subsection B of this section or the
information specified in subparagraphs a through e of paragraph 1 of
subsection B of this se ction or subparagraphs a through c of
paragraph 2 of subsection B of this section, as applicable, and a
statement that any claim that the defective corporate act or
putative stock ratified hereunder is void or vo idable due to the
failure of authorization, or that the district court should declare
in its discretion that a ratification in accordance with this
section not be effective or be effective only on certain conditions
must be brought within one hundred twent y (120) days from the later
of the validation effective time or the time at which the notice
required by this subsection is given. Notwithstanding the
foregoing, no such notice shall be required if notice of the
ratification of the defective corporate act is to be given in
accordance with subsectio n D of this section, and in the case of a
corporation that has a class of stock listed on a national
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securities exchange, the notice required by this subsection and
subsection D of this section may be deemed given if disclosed in a
document publicly filed by the corporation with the Securities and
Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, or the corresponding provisions
of any subsequent United States federal securities laws, rules or
regulations. If any defective corporate act has been approved by
shareholders acting pursuant to Section 1 073 of Title 18 of the
Oklahoma Statutes this title, the notice required by this subsection
may be included in any notice required to be given pursuant to
subsection F of Section 1073 of Title 18 of the Oklahoma St atutes
this title and, if so given, sha ll be sent to the shareho lders
entitled to notice under subs ection F of Section 1073 of Title 18 of
the Oklahoma Statutes this title and to all holders of valid and
putative stock to whom notice would be required under this
subsection if the defective corporate act h ad been approved at a
meeting other than any shar eholder who approved the action by
consent in lieu of a meeting pursuant to Section 1073 of Title 18 of
the Oklahoma Statutes this title or any holder of put ative stock who
otherwise consented thereto in writing . Solely for purposes of
subsection D of this section and this subsection, notice to holders
of putative stock, and notice to holders of valid stock and putative
stock as of the time of the defective c orporate act, shall be
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treated as notice to holders of valid stock for purposes of Sec tions
1067, 1073, 1074, 1075, 1075.2 and 1075.3 of Title 18 of the
Oklahoma Statutes this title.
H. As used in this section and in Section 10 of this act 1055.2
of this title only, the term:
1. “Defective corporate act” means an overissue, an election or
appointment of directors that is void or voidable due to a failure
of authorization, or any act or transaction purportedly taken by or
on behalf of the corporation that is, and at the time such act or
transaction was purportedly taken would have been, within the power
of a corporation under subchapter II of Tit le 18 of the Oklahoma
Statutes this title, without regard to the failure of authorization
identified in subparagraph d of paragraph 1 of subsection B of this
section, but is void or voidable due to a failure of a uthorization;
2. “Failure of authorization ” means (a):
a. the failure to authorize or effect an act or
transaction in compliance with:
(1) the provisions of Title 18 of the Oklahoma
Statutes this title,
(2) the certificate of incorporation or bylaws of th e
corporation, or
(3) any plan or agreement to which the corporation is
a party or the disclosure set forth in any proxy
or consent solicitation statement, if and to the
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extent such failure would render such act or
transaction void or voidable, or (b)
b. the failure of the board of directors or any officer
of the corporation to authorize or approve any act or
transaction taken by or on behalf of the corporatio n
that would have required for its due authorization the
approval of the board of directors or such officer;
3. “Overissue” means the purported issuance of (a) shares of
capital stock of a class or series in excess of the number of shares
of such class or series the corporation has the power to issue under
Section 1042 of Title 18 of the Oklahoma Statu tes this title at the
time of such issuance, or (b) shares of any class or series of
capital stock that is not then authorized for issuance by the
certificate of incorporation of the corporati on;
4. “Putative stock” means the shares of any class or series of
capital stock of the corporation, includ ing shares issued upon
exercise of options, rights, warrants or other securities
convertible into shares of capit al stock of the corporation, or
interests with respect thereto that were created or issue d pursuant
to a defective corporate act, that: (a) but for any failure of
authorization, would constitute valid stock, or (b) cannot be
determined by the board of dire ctors to be valid stock;
5. “Time of the defective corporate act ” means the date and
time the defective corporate act was purported to have be en taken;
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6. “Valid stock” means the shares of any class or series of
capital stock of the corporation that have been duly authorized and
validly issued in accordance with Title 18 of the Oklahoma Stat utes
this title; and
7. “Validation effective time” with respect to any defective
corporate act ratified pursuant to this section means the latest of
(a) the time at which the defective act submitted to the
shareholders for approval pursuant to subsection C of thi s section
is approved by such shareholders, or if no such vote of shareholders
is required to approve the ratification, the time at which the board
of directors adopts the resolutions required by paragrap hs 1 or 2 of
subsection B of this section, (b) w here no certificate of validation
is required to be filed pursuant to subsection E of this section,
the time, if any, specified by the board of directors in the
resolutions adopted pursuant to paragraphs 1 or 2 of subsection B of
this section, which time shall not precede the time at which such
resolutions are adopted; and (c) the time at which any certificate
of validation filed pursuant to subsection E of this se ction shall
become effective in accordance wit h Section 1007 of Title 18 of the
Oklahoma Statutes this title.
In the absence of actual f raud in the transaction, the judgment
of the board of directors that shares of stock are valid stock or
putative stock shall be conclusive, unless otherwise determined by
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the District Court in a proceeding brought purs uant to Section 10 of
this act 1055.2 of this title.
I. Ratification under this section or validation under Section
10 of this act 1055.2 of this title shall not be deemed to be the
exclusive means of ratifying or validating any act or transaction
taken by or on behalf of the corporation, including any defective
corporate act, or any issuance of stock, including any putative
stock, or of adopting or endors ing any act or transaction taken by
or in the name of the corporation prior to the commencement of its
existence, and the absence or failure of rat ification in accordance
with either this section or validation under Section 10 of this act
1055.2 of this title shall not, of itself, affect the v alidity or
effectiveness of any act or transaction or the issuan ce of any stock
properly ratified under commo n law or otherwise, nor shall it create
a presumption that any such act or transaction is or was a defective
corporate act or that such stock is vo id or voidable.
SECTION 7. AMENDATORY 18 O.S. 2011, Section 1064, as
amended by Section 14, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1064), is amended to read as follows:
Section 1064.
LIST OF SHAREHOLDERS ENTITLED TO VOTE; PEN ALTY FOR REFUSAL TO
PRODUCE STOCK LEDGER
A. The officer who has charge of the stock ledger of a
corporation shall prepare and make, at least ten (10) days before
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every meeting of shareholders, a complete list of the shareholders
entitled to vote at the me eting; provided, however, if the rec ord
date for determining the shareholders entitled to v ote is less than
ten (10) days before the meeting date, the list shall reflect the
shareholders entitled to vote as of th e tenth day before the meeting
date, arranged in alphabetical order, and showing the address of
each shareholder and the number of shar es registered in the name of
each shareholder. Nothing contained in this section shall require
the corporation to includ e electronic mail addresses or other
electronic contact information on the list. The list shall be open
to the examination of any shar eholder, for any purpose germane to
the meeting for a period of at least ten (10) days prior to the
meeting:
1. On a reasonably accessible electronic network; provi ded,
that the information required to gain access to the list is provided
with the notice of the meeting; or
2. During ordinary business hours, at the principal place of
business of the corporation. In the event that the corporation
determines to make the list available on an electronic net work, the
corporation may take reasonable steps to ensu re that the information
is available only to shareholders of the corporation. If the
meeting is to be held at a place, t hen the list shall also be
produced and kept at the time and place of the meetin g during the
whole time thereof, and may be inspected b y any shareholder who is
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present. If the meeting is to be held solely by means of remote
communication, then the list sh all also be open to the examination
of any shareholder during the whole time of the meeting on a
reasonably accessible electronic netwo rk, and the information
required to access the list shall be provided with the notice of the
meeting.
B. Upon the willful neglect or refusal of the directors to
produce such a list at any meeting for the election of directors
held at a place, or to open such a list to examination on a
reasonably accessible electronic network during any meeting for the
election of directors held solely by means of remote communication ,
they shall be ineligible for elect ion to any office at the meeting.
C. For the purposes of the Oklahoma General Corporation Act,
“stock ledger” means one or more records administered by or on
behalf of the corporation in which the names of all the
corporation’s shareholders of record, the address and number of
shares registered in the name of each such shareholder and all
issuances and transfers of stock of the corporation are recorded in
accordance with Secti on 1069 of this title. The stock ledger shall
be the only evidence as to who are the shareholders entitled by this
section to examine the list required by this section or to vote in
person or by proxy at any meeting of shareholders.
SECTION 8. AMENDATORY 18 O.S. 2011, Section 1069, is
amended to read as follows:
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Section 1069.
FORM OF RECORDS
Any records maintained administered by or on behalf of a
corporation in the regular course of its business, including its
stock ledger, books of account, and minute books, may be kept on, or
by means of, or be in the form of, any informati on storage device,
or method or one or more electronic networks or databases including
one or more distributed electronic networks or databases; provided
that the records so kept can be converted in to clearly legible paper
form within a reasonable time , and, with respect to the stock
ledger, that the records so kept (i) can be used to prepare the list
of shareholders specified in Sections 1064 a nd 1065 of this title,
(ii) record the information specified in Sections 1037, 1040 and
1063, and subsection A of Section 1062 of this title, and (iii)
record transfers of stock as governed by Article 8 of the Uniform
Commercial Code. Any corporation shall so convert any records so
kept into clearly legible paper form upon the request of any person
entitled to inspect the records pursuant to any provision of t he
Oklahoma General Corporation Act. Where records are kept in the
manner, a clearly legible paper form produced prepared from or by
means of the information storage device , or method shall be
admissible in evidence and shall be accepted for all other purposes,
to the same extent as an original paper record of the same
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information would have been, when the paper for m accurately portrays
the record.
SECTION 9. AMENDATORY 18 O.S. 2 011, Section 1073, as
amended by Section 19, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1073), is amended to read as follows:
Section 1073.
CONSENT OF SHAREHOLDERS IN LIEU OF MEETING
A. Unless otherwise provided for in the certificate of
incorporation, any action required by the provisions of th e Oklahoma
General Corporation Act to be taken at any annual or special meeting
of shareholders of a corporation or any action which may be taken at
any annual or special meeting of shareholders, may be taken without
a meeting, without prior notice, and wi thout a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the
minimum number of votes that would be n ecessary to authorize or take
the action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the co rporation by
delivery to its registered office i n this state, its principal place
of business, or an o fficer or agent of the corporation having
custody of the book in which proceedings of meetings of shareholders
are recorded. Delivery made to a corporati on’s registered office
shall be by hand or by ce rtified or registered mail, return receipt
requested.
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B. Unless otherwise provided for in the certificate o f
incorporation, any action required by the provisions of the Oklahoma
General Corporation Act to be taken at a meeting of the members of a
nonstock corporation, or any action which may be taken at any
meeting of the members of a nonstock corporation, may be taken
without a meeting, without prior notice and without a vote, if a
consent or consents in wri ting, setting forth the action taken,
shall be signed by members having not less than the minimum numb er
of votes that would be necessary to authorize or ta ke such action at
a meeting at which all members having a right to vote thereon were
present and voted and shall be delivered to the corporation by
delivery to its registered office in this state, its p rincipal place
of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of shareholders
are recorded. Delivery made to a corporation’s registered office
shall be by hand or by certified or register ed mail, return receipt
requested.
C. 1. A telegram, cablegram or other An electronic
transmission consenting to an action to be taken and transmitted b y
a shareholder, member or proxyholder, or by a per son or persons
authorized to act for a shareholder, me mber or proxyholder, shall be
deemed to be written , and signed and dated for the purposes of this
section; provided that any telegram, cablegram or oth er electronic
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transmission sets forth or is delivered w ith information from which
the corporation can determi ne:
a. that the telegram, cablegram or other electronic
transmission was transmitted by the shareholder,
member or proxyholder or by a person or pe rsons
authorized to act for the shareholder, member or
proxyholder, and
b. the date on which the shareholder, member or
proxyholder or authorized person or persons
transmitted the telegram, cablegram or electronic
transmission.
The date on which the telegr am, cablegram or electronic
transmission is transmitted shall be deemed to be the date on which
the consent was signed. No consent given by telegram, cable gram or
other electronic transmission shall be deemed to have been delivered
until the consent is re produced in paper form and until the paper
form shall be delivered to the corporation by delivery to its
registered office in this state, its principal plac e of business or
an officer or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders or members are
recorded. Delivery made to a corporation ’s registered office shall
be made by hand or by certified or regist ered mail, return receipt
requested. Notwithstanding the foregoing limitations on delivery,
consents given by telegram, cablegram or other electronic
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transmission may be otherwise delivered to the principal p lace of
business of the corporation or to an of ficer or agent of the
corporation having custody of the book in which proceedings of
meetings of shareholders or members are recorded if, to the extent
and in the manner provided by resolution of the board of directors
or governing body of the corporation .
2. A consent given by electronic transmission is delivered to
the corporation upon the earliest of :
a. when the consent enters an information processing
system, if any, designated by the corporation for
receiving consents, so long as the electronic
transmission is in a form capable of being processed
by that system and the corporation is able to retrieve
that electronic transmission,
b. when a paper reproduction of the consent is delivered
to the corporation’s principal place of business or an
officer or agent of the corporation having custody of
the book in which proceedings of meetings of
stockholders or members are recorded,
c. when a paper reproduction of the consent is delivered
to the corporation’s registered office in this state
by hand or by certif ied or registered mail, return
receipt requested, or
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d. when delivered in such other manner, if any, provide d
by resolution of the board of directors or governing
body of the corporation.
Whether the corporation has so designated an information processing
system to receive consents is determined by the certificate of
incorporation, the bylaws or from the context and surrounding
circumstances including the conduct of the corporation. A consent
given by electronic transmission is delivered under this section even
if no person is aware of its receipt. Receipt of an electronic
acknowledgement from an information processing system establishes
that a consent given by electronic transmission was received but, by
itself, does not establish that the content sent c orresponds to the
content received.
3. Any copy, facsimile or other reliable reproduction of a
consent in writing may be substituted or used in lieu of the
original writing for any and all purposes for which the original
writing could be used; provided that the copy, facsimile or other
reliable reproduction shall be a complete reproduction of the entire
original writing.
D. Every written consent shall bear the date of signature of
each shareholder or member who s igns the consent and no No written
consent shall be effective to take the corporate action referred to
therein unless, within sixty (60) days of the earliest dated consent
delivered in the manner required by this section to the corporat ion,
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written consents signed by a sufficient number of holders or members
to take action are delivered to the corporation by delivery to its
registered office in this state, its principal place of business, or
an officer or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders are recorded.
Delivery made to a corporation’s registered office shall be by hand
or by certified or registered mail, return receipt requested in the
manner required by this section within sixty (60) days of the first
date on which a written consent is so delivered to the corporation.
Any person executing a consent may provide, whether through
instruction to an agent or otherwise, that such a consent wi ll be
effective at a future time , including a time determined upon the
happening of an event, no l ater than sixty (60) days after such
instruction is given or such provision is made and, for the purposes
of this section, if evidence of such instruction or provision is
provided to the corpora tion, such later effective time shall serve
as the date of signature. Unless otherwise provided, any such
consent shall be revocable prior to its becoming effective.
E. Prompt notice of the taking of the corporate acti on without
a meeting by less than un animous written consent shall be given to
those shareholders o r members, as the case may be, who have not
consented in writing and who, if the action had been taken at a
meeting, would have been entitled to notice of the meeting if the
record date for noti ce of the meeting had been the date that written
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consents signed by a sufficient number of shareholders or members to
take the action were delivered to the corporation as provided in
subsection B of this section. In the event that the action for
which consent is given is an action that would have required the
filing of a certificate under any other section of this title if the
action had been voted on by shareholders or by members at a meeting
thereof the certificate fil ed under the other section shall sta te,
in lieu of any statement required by the section concernin g any vote
of shareholders or members, that written consent has been given in
accordance with the provisio ns of this section.
SECTION 10. AMENDATORY 18 O.S. 2 011, Section 1075.2, as
amended by Section 14, Chapter 88, O.S.L. 2019 (18 O.S. Supp. 2020,
Section 1075.2), is amended to read as follows:
Section 1075.2.
ELECTRONIC NOTICE; EFFECTIV ENESS; REVOCATION OF CONSENT
A. Without limiting the m anner of which notice other wise may be
given effectively to shareholders, any notice to shareholders given
by the corporation under any provision of the Oklahoma General
Corporation Act, the certificat e of incorporation, or the bylaws
shall be effective if given by a form of electro nic transmission
consented to by the shareholder to whom the notice is given. The
consent shall be revocable by the shareholder by written notice to
the corporation. The co nsent shall be deemed revoked if:
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1. The corporation i s unable to deliver by elec tronic
transmission two consecutive notices given by the corp oration in
accordance with the consent; and
2. The inability becomes known to the secretary or an assistant
secretary of the corporation or to the transfer agent, or o ther
person responsible for the giving of notice ; provided, however, the
inadvertent failure to treat the inability as a revocation shall not
invalidate any meeting or other action.
B. Notice given pursuant to subsection A of this section shall
be deemed given if by:
1. Facsimile telecommunication, wh en directed to a number at
which the shareholder has consented to receive notice;
2. Electronic mail, when directed to an electronic mail address
at which the shareholder has consented to receive notice;
3. A posting on an electronic network together wit h separate
notice to the shareholder of the specific posting, upon the later
of:
a. the posting, and
b. the giving of the separate notice; and
4. Any other form of electronic transmission, when directed to
the shareholder in accordanc e with the shareholde r’s consent.
An affidavit of the secreta ry or an assistant secretary or of
the transfer agent or other agent of the corporation that the notice
has been given by a form of electronic transmission shall, in th e
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absence of fraud, be prim a facie evidence of t he facts stated
therein.
C. For purposes of the Oklahoma General Corporation Act,
“electronic transmission” means any form of communication, not
directly involving the physical transmission of paper, including the
use of, or participation in, one or more electronic networks or
databases including one or more distributed electronic networks or
databases, that creates a record that may be retained, retrieved,
and reviewed by a recipient thereof, and that may be directly
reproduced in paper form by such a rec ipient through an automated
process.
D. This section shall not apply to Sections 1045 or 1111 of
this title.
SECTION 11. AMENDATORY 18 O.S. 2011, Section 1081, as
amended by Section 22, Chapter 323 , O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1081), is amended to read as follows:
Section 1081.
MERGER OR CONSOLIDATION OF DOMESTIC CORPORATIONS
A. Any two or more domestic corporations existing under the
laws of this state may merge into a single surviving corporation,
which may be any one of the constituent corporations or may
consolidate into a new resulting corporation formed by the
consolidation, pursuant to an agreement of merger or c onsolidation,
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as the case may be, complying and approved in accordance with t he
provisions of this section.
B. The board of directors of each corporation which desires to
merge or consolidate shall adopt a resolution approving an agreement
of merger or consolidation and declaring its advisability. The
agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. In the case of a merger, the amendments or changes in the
certificate of incorporation of the surviving corporation as are
desired to be effected by the merger, which amendments or changes
may amend and restate the certificate of incorporation of the
surviving corporation in its entirety, or, if no amendments or
changes are desired, a statement that the certificate of
incorporation of the surviving cor poration shall be its certificate
of incorporation of the surviving or resulting corporation;
4. In the case of a consolidation, that the certificate of
incorporation of the resu lting corporation shall be as is set forth
in an attachment to the agreement;
5. The manner, if any, of converting the shares of each of the
constituent corporations into shares or other securities of the
corporation surviving or resulting from the merger or consolidation,
or of canceling some or all of the shares, and, if any sha res of any
of the constituent corporations are not to remain outstanding, to be
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converted solely into shares or other securities of the surviving or
resulting corporation or to be canceled, the cash, property, rights,
or securities of any other corporation or entity which the holders
of the shares are to receive in exchange for or upon conversion of
the shares and the surrender of any certificates evidencing them,
which cash, property, rights, or securities of any other corporation
or entity may be in addit ion to or in lieu of shares or other
securities of the surviving or resulting corporation; and
6. Other details or provisions as are deemed desirable,
including without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance or
recognition of fractional shares, interests or rights or other
securities of the surviving or resulting corporation or of any other
corporation or entity the sh ares, rights or other securities of
which are to be received in the merger or consolidation, or for any
other arrangement with respect thereto, consistent with the
provisions of Section 1036 of this title. The agreement so adopted
shall be executed and ac knowledged in accordance with the provisions
of Section 1007 of this title. Any of the terms of the agreement of
merger or consolidation may be made dependent upon facts
ascertainable outside of the agreement; provided, that the manner in
which these facts shall operate upon the terms of the agreement is
clearly and expressly set forth in the agreement of merger or
consolidation. The term “facts” as used in this paragraph,
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includes, but is not limited to, the occurrence of any event,
including a determina tion or action by any person or body, including
the corporation.
C. The agreement required by the provisions of subsection B of
this section shall be submitted to the shareholders of each
constituent corporation at an annual or special meeting thereof for
the purpose of acting on the agreement. Due notice of the time,
place, and purpose of the meeting shall be mailed to each holder of
stock whether voting or nonvoting, of the corporation at the address
which appears on the records of the corporation, at l east twenty
(20) days before the date of the meeting. T he notice shall contain
a copy of the agreement or a brief summary thereof; provided,
however, the notice shall be effective only with respect to mergers
or consolidations for which the notice of the shareholders meeting
to vote thereon has been mailed aft er November 1, 1988. At the
meeting the agreement shall be considered and a vote taken for its
adoption or rejection. If a majority of the outstanding stock of
the corporation entitled to vote there on shall be voted for the
adoption of the agreement, tha t fact shall be certified on the
agreement by the secretary or the assistant secretary of the
corporation; provided, that such certification on the agreement
shall not be required if a certificate of merger or consolidation is
filed in lieu of filing the a greement. If the agreement shall be so
adopted and certified by each constituent corporation, it shall then
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be filed and shall become effective in accordance with the
provisions of Section 1007 of th is title. In lieu of filing an
agreement of merger or c onsolidation required by this section, the
surviving or resulting corporation may file a certificate of merger
or consolidation executed in accordance with the provisions of
Section 1007 of this title and which states:
1. The name and state of incorporati on of each of the
constituent corporations;
2. That an agreement of merger or consolidation has been
approved, adopted, executed, and acknowledged by each of the
constituent corporations in accordanc e with the provisions of this
section;
3. The name of the surviving or resulting corporation;
4. In the case of a merger, the amendments or changes in the
certificate of incorporation of the surviving corporation, which may
be amended and restated, that are desired to be effected by the
merger, which amendmen ts or changes may amend and restate the
certificate of incorporation of the surviving corporation in its
entirety, or, if no amendments or changes are desired, a statement
that the certificate of inco rporation of the surviving corporation
shall be its certificate of incorporation;
5. In the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the certificate;
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6. That the executed agreement of consolidation or merger is on
file at the principal place of business of the surviving or
resulting corporation, stating the address thereof; and
7. That a copy of the agreement of consolidation or merger will
be furnished by the surviving or resulting corporation, on request
and without cost, to any shar eholder of any constituent corporation.
For purposes of Sections 1084 and 1086 of this title, the term
“shareholder” shall be deemed to include “member”.
D. Any agreement of mer ger or consolidation may contain a
provision that at any time prior to the ti me that the agreement, or
a certificate filed with the Secretary of State in lieu thereof,
becomes effective in accordance with Section 1007 of this title, the
agreement may be terminated by the board of directors of any
constituent corporation notwithstan ding approval of the agreement by
the shareholders of all or any of the constituent corporations;
provided, if the agreement of merger or consolidation is terminated
after the filing of the agreement, or a certificate filed with the
Secretary of State in l ieu thereof, but before the agreement or
certificate has become effective, a certificate of termination of
merger or consolidation shall be filed in accordance with Section
1007 of this title. Any agreement of merger or consolidation m ay
contain a provision that the boards of directors of the constituent
corporations may amend the agreement at any time prior to the time
that the agreement, or a certificate filed with the Secretary of
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State in lieu thereof, becomes effective in accordanc e with Section
1007 of this title; provided, that an amendment made subsequent to
the adoption of the agreement by the shareholders of any constituent
corporation shall not:
1. Alter or change the a mount or kind of shares, securities,
cash, property, or rights to be received in exchange for or on
conversion of all or any of the shares of any class or series
thereof of the constituent corporation;
2. Alter or change any term of the certificate of inc orporation
of the surviving corporation to be effected by the merger or
consolidation; or
3. Alter or change any of the terms and conditions of the
agreement if an alteration or change would adversely affect the
holders of any class or series thereof of t he constituent
corporation.
If the agreement of merger or consolidation is amended after the
filing of the agreement, or a certificate in lieu thereof, with the
Secretary of State, but before the agreement or certificate has
become effective, a certificate of amendment of merger or
consolidation shall be filed i n accordance with Se ction 1007 of this
title.
E. In the case of a merger, the certificate of incorporation of
the surviving corporation shall automatically be amended to the
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extent, if any, that cha nges in the certificate of incorporation are
set forth in the certificate of merger.
F. Notwithstanding the requirements of subsection C of this
section, unless required by its certificate of incorporation, no
vote of shareholders of a constituent corpora tion surviving a merger
shall be necessary to authorize a merger if:
1. The agreement of merger does not amend in any respect the
certificate of incorporation of the constituent corporation;
2. Each share of stock of the constituent corporation
outstanding immediately prior to the effective date of the merger is
to be an identical outstanding or treasury share of the surviving
corporation after the effective date of the merger; and
3. Either no shares of common stock of the surviving
corporation and no s hares, securities, or obligations convertible
into such stock are to be issue d or delivered under the plan of
merger, or the authorized unissued shares or the treasury shares of
common stock of the surviving corporation to be issued or delivered
under the plan of merger plus those initially issuable upon
conversion of any other sha res, securities, or obligations to be
issued or delivered under the plan do not exceed twenty percent
(20%) of the shares of common stock of the constituent corporation
outstanding immediately prior to the effective date of the merger.
No vote of shareholders of a constituent corporation shall be
necessary to authorize a merger or consolidation if no shares of the
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stock of the corporation shall have been issued prior to the
adoption by the board of directors of the resolution approving the
agreement of merger or consolidation. If an agreement of merger is
adopted by the constituent corporation surviving the merger, by
action of its board of directors and without any vote of its
shareholders pursuant to the provisions of this subsection, the
secretary or assistant secretary of that corporation shall certify
on the agreement that the agreement has been adopted pursuant to the
provisions of this subsection and:
a. if it has been adopt ed pursuant to paragraph 1 of this
subsection, that the c onditions specified have been
satisfied, or
b. if it has been adopted pursuant to paragraph 2 of this
subsection, that no shares of stock of the corporation
were issued prior to the adoption by the b oard of
directors of the resolution approving the agreeme nt of
merger or consolidation; provided, that such
certification on the agreement shall not be required
if a certificate of merger or consolidation is filed
in lieu of filing the agreement.
The agreement so adopted and certified shall then be filed and
shall become effective in accordance with the provisions of Section
1007 of this title. Filing shall constitute a representation by the
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person who executes the certificate that the facts stated in the
certificate remain true immediately prior to filing.
G. 1. Notwithstanding the requirements of subsection C of this
section, unless expressly required by its certificate of
incorporation, no vote of shareholders of a constituent corporation
shall be necessary to authorize a merger with or into a single
direct or indirect wholly o wned subsidiary of the constituent
corporation if:
a. the constituent corporation and the direct or indirect
wholly owned subsidiary of the constituent corporation
are the only constituent entities to the merger,
b. each share or fracti on of a share of the capital stock
of the constituent corporation outstanding immediately
before the effective time of the merger is converted
in the merger into a share or equal fraction of share
of capital stock of a holding company having the same
designations, rights, pow ers, and preferences, and the
qualifications, limitations, and restrictions thereof,
as the share of stock of the constituent corporation
being converted in the merger,
c. the holding company and the constituent corporation
are domestic corporations of this state and the direct
or indirect wholly owned subsidiary that is the other
constituent entity to the merger is a domestic
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corporation or limited liability company of this
state,
d. the certificate of incorporation and bylaws of the
holding company imme diately following the eff ective
time of the merger contain provisions identical to the
certificate of incorporation and bylaws of the
constituent corporation immediately befo re the
effective time of the merger, other than provisions,
if any, regarding the incorporator or incorpora tors,
the corporate name, the registered office and agent,
the initial board of directors, and the initial
subscribers of shares and provisions conta ined in any
amendment to the certificate of incorporation as were
necessary to effect a change, exchange,
reclassification, subdivision, combination or
cancellation of stock, if a change, exchange,
reclassification, or cancellation has become
effective,
e. as a result of the merger, the constituent corporation
or its successor corporati on becomes or remains a
direct or indirect wholly owned subsidiary of the
holding company,
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f. the directors of the constituent corporation become or
remain the directors of t he holding company upon the
effective time of the merger,
g. the organizational do cuments of the surviving entity
immediately following the effective time of the merger
contain provisions identical to the certificate of
incorporation of the constituent cor poration
immediately before the effective time of the merger,
other than provision s, if any, regarding the
incorporator or incorporators, the corporate or entity
name, the registered office and agent, the initial
board of directors and the initial subscrib ers for
shares, references to members rather than
shareholders, references to inte rests, units or the
like rather than stock or shares, references to
managers, managing members or other members of the
governing body rather than directors and such
provisions contained in any amendment to the
certificate of incorporation as were necessary to
effect a change, exch ange, reclassification,
subdivision, combination or cancellation of stock, if
such change, exchange, reclassification, subdivision,
combination or cancellation has become effective;
provided, however, that:
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(1) if the organizationa l documents of the surviv ing
entity do not contain the following provisions,
they shall be amended in the merger to contain
provisions requiring that:
(a) any act or transaction by or involving the
surviving entity, other than the election or
removal of directors or managers, mana ging
members or other members of the governing
body of the surviving entity, that requires
for its adoption under this act the Oklahoma
General Corporation Act or its
organizational documents the approval of the
shareholders or members of the surviving
entity shall, by specific reference to this
subsection, require, in addition, the
approval of the shareholders of the holding
company (or any successor by merg er), by the
same vote as is required by this act the
Oklahoma General Corporation Act and/or by
the organizational documents of the
surviving entity; provided, however, that
for purposes of this subdivision, any
surviving entity that is not a corporation
shall include in such amendment a
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requirement that the approval of t he
shareholders of the holding company be
obtained for any act or transaction by or
involving the surviving entity, other than
the election or removal of directors or
managers, managing mem bers or other members
of the governing body of the surviving
entity, which would require the approval of
the shareholders of the surviving entity if
the surviving entity were a corporation
subject to this act the Oklahoma General
Corporation Act,
(b) any amendment of the organizational
documents of a surviving entity that is not
a corporation, which amend ment would, if
adopted by a corporation subject to this act
the Oklahoma General Corporation Act, be
required to be included in the certificate
of incorporation of such corporation, shall,
by specific reference to this subsection,
require, in addition, the approval of the
shareholders of the holding company, or any
successor by merger, by the same vote as is
required by this act the Oklahoma General
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Corporation Act and/or by the organizational
documents of the surviving e ntity, and
(c) the business and affa irs of a surviving
entity that is not a corporation shall be
managed by or under the direction of a board
of directors, board of managers or other
governing body consisting of individuals who
are subject to the same fidu ciary duties
applicable to, and who are liable for breach
of such duties to the same extent as,
directors of a corporation subject to this
act the Oklahoma General Corporation Act ,
and
(2) the organizational documents of the survivi ng
entity may be amended in the merger:
(a) to reduce the number of classes and shares
of capital stock or other equity interests
or units that the surviving entity is
authorized to issue, and
(b) to eliminate any provision authorized by
subsection D of Section 1027 of this title;
and
h. the shareholders of the constituent corporation do not
recognize gain or loss for federal income tax purposes
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as determined by the board of directors of the
constituent corporation.
Neither division (1) of subparagraph g of paragraph 1 of this
subsection nor any provision of a surviving entity’s organizational
documents required by division (1) of subparagraph g of paragraph 1
of this subsection shall be deemed or constru ed to require approval
of the shareholders of the hold ing company to elect or r emove
directors or managers, managing members or other members of the
governing body of the surviving entity.
2. As used in this subsection, the term “holding company” means
a corporation which, from its incorporation until consum mation of a
merger governed by this subsection, was at all times a direct or
indirect wholly owned subsidiary of the constituent corporation and
whose capital stock is issued in a merger.
3. As used in this subsection, the term “organizational
documents” means, when used in refer ence to a corporation, the
certificate of incorporation of the corporation and, when used in
reference to a limited liability company, the articles of
organization and the opera ting agreement of the limited liability
company.
4. From and after the effecti ve time of a merger adopted by a
constituent corporation by action of its board of directors and
without any vote of shareholders pursuant to this subsection:
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a. to the extent the restriction of Section 1090.3 of
this title applied to the constituent corpo ration and
its shareholders at the effective time of the merger,
restrictions shall apply to the holding company and
its shareholders immediately after the effective time
of the merger as though it were the constituent
corporation, and all shareholders of stock of the
holding company acquired in the merger shall for
purposes of Section 1090.3 of this title be deemed to
have been acquired at the time that the shares of
stock of the constituent corporation converted in the
merger were acquired; provided, that any shareholder
who immediately before the effective time of the
merger was not an interested shareholder within the
meaning of Section 1090.3 of this title shall not
solely by reason of the merger become an interested
shareholder of the holding company,
b. if the corporate name of the holding company
immediately following the effective time of the merger
is the same as the corporate name of the constituent
corporation immediate ly before the effective time of
the merger, the shares of capital stock of the holding
company into which the shares of capital stock of the
constituent corporation are converted in the merger
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shall be represented by the stock certificates that
previously represented the shares of capital stock of
the constituent corporation, and
c. to the extent a shareholder of the constituent
corporation immediately before the merger had standing
to institute or maintain derivative litigation on
behalf of the constituent corporation, nothing in this
section shall be deemed to limit or extinguish su ch
standing.
5. If any agreement of merger is adopted by a constituent
corporation by action of its board of directors and without any vote
of shareholders pursuant to this sub section, the secretary or
assistant secretary of the c onstituent corporation sh all certify on
the agreement that the agreement has been adopted pursuant to this
subsection and that the conditions specified in paragraph 1 of this
subsection have been satisf ied; provided, that such certification on
the agreement shall not be required i f a certificate of merger or
consolidation is filed in lieu of filing the agreement. The
agreement so adopted and certified shall then be filed and become
effective in accordan ce with Section 1007 of this title. Filing
shall constitute a representation b y the person who executes the
agreement that the facts stated in the certificate remain true
immediately before the filing.
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H. Notwithstanding the requirements of subsection C of this
section, unless expressly required by its cert ificate of
incorporation, no vote of shareholders of a constituent corporation
that has a class or series of stock that is listed on a national
securities exchange or held of record by more than two tho usand
holders immediately prior to the execution of th e agreement of
merger by such constituent corporation shall be necessary to
authorize a merger if:
1. The agreement of merger expressly (a) permits or requires
such merger to be effected under this sub section and (b) provides
that such merger shall be eff ected as soon as practica ble following
the consummation of the offer referred to in paragraph 2 of this
subsection if such merger is effected under this subsection;
2. A corporation consummates an offe r for all of the
outstanding stock of such constituent corporation on the terms
provided in such agreement of merger that, absent this subsection,
would be entitled to vote on the adoption or rejection of the
agreement of merger; provided, however, that su ch offer may be
conditioned on the tender of a minimum number or percentage of
shares of the stock of such constituent corporation, or of any
class or series thereof, and such offer may exclude any excluded
stock; and provided further, that the corporation may consummate
separate offers for separate classes o r series of the stock of such
constituent corporation;
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3. Immediately following the consummation of the offer referred
to in paragraph 2 of this subsection, the stock irrevocably accepted
for purchase or exchange pursuant to such offer and received by the
depository prior to expi ration of such offer, together with the
stock otherwise owned by the consummating corporation or its
affiliates and any rollover stock, equals at least such percentage
of the shares of stock of such constituent corporation, and of each
class or series ther eof, that, absent this subsection, would be
required to adopt the agreement of merger by this chapter and by the
certificate of incorporation of such constituent corporation;
4. The corporation consummating the offer referred to i n
paragraph 2 of this sub section merges with or into such constituent
corporation pursuant to such agreement;
5. Each outstanding share, other than shares of excluded stock,
of each class or series of stock of the constituent corporation that
is the subject of and not irrevocably accepted for purchase or
exchange in the offer referred to in paragraph 2 of this subsection
is to be converted in such merger into, or into the right to
receive, the same amou nt and kind of cash, property, rights or
securities paid for shares of such cla ss or series of stock of such
constituent corporation irrevocably accepted for purchase or
exchange in such offer; and
6. As used in this subsection only, the term:
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a. “affiliate” means, in respect of the corporation
making the offer referred to in paragraph 2 of this
subsection, any person that (1) owns, directly or
indirectly, all of the outstanding stock of such
corporation or (2) is a direct or indirect wholly
owned subsidiary of such corporation or of any person
referred to in proviso (1) of this subp aragraph,
b. “consummates”, and with correlative meaning,
“consummation” and “consummating”, means irrevocably
accepts for purchase or exchange stock tendered
pursuant to an offer,
c. “depository” means an agent, including a depository,
appointed to facilitate consummation of the offer
referred to in paragraph 2 of this subsection,
d. “excluded stock” means (1) stock of such constituent
corporation that is owned at the commencement of the
offer referred to in paragraph 2 of this subsection by
such constituent corporation, the corporation making
the offer referred to in paragraph 2 of this
subsection, any person that owns, directly or
indirectly, all of the outstanding stock of the
corporation making such offer, or any direct or
indirect wholly owned subsidiary of any of the
foregoing and (2) rollover stock,
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e. “person” means any individual, corporation,
partnership, limited liability company, unincorporated
association or other ent ity,
f. “received” solely for purposes of paragraph 3 of this
subsection means (1) with respect to certificated
shares, physical receipt of a stock certificate
accompanied by an executed letter of transmittal, (2)
with respect to uncertificated shares held of record
by a clearing corporation as nominee, transfer into
the depository’s account by means of an agent’s
message, and (3) with respect to uncertificated shares
held of record by a person other than a clearing
corporation as nominee, physical receipt of an
executed letter of transmittal by the depository;
provided, however, that shares shall cease to be
“received” (4) with respect to certificated shares, if
the certificate representing such shares was canceled
prior to consummation of the offer referred to in
paragraph 2 of this subsection, or (5) with respect
to uncertificated shares, to the extent such
uncertificated shares have been reduced or eliminated
due to any sale of such shares prior to consummation
of the offer referred to in paragraph 2 of this
subsection, and
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g. “rollover stock” means any shares of stock of such
constituent corporation that are the subject of a
written agreement requiring such shares to be
transferred, contributed or delivered to the
consummating corporation or any of its affiliates in
exchange for stock or other equity interests in such
consummating corporation or an affiliate thereof;
provided, however, that such shares of stock shall
cease to be rollover stock for purposes of paragraph 3
of this subsection if, immediately prior to the time
the merger becomes effective under this chapter, such
shares have not been transferred, contributed or
delivered to the consummating corporation or any of
its affiliates pursuant to such written agreement.
If an agreement of merger is ado pted without the vote of
shareholders of a corporation pursuant to this subsect ion, the
secretary or assistant secretary of the surviving corporation shall
certify on the agreement that the agreement has been adopted
pursuant to this subsection and that th e conditions specified in
this subsection, other than the condition listed in p aragraph 4 of
this subsection, have been satisfied; provided, that such
certification on the agreement shall not be required if a
certificate of merger is filed in lieu of filin g the agreement. The
agreement so adopted and certifi ed shall then be filed an d shall
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become effective, in accordance with Section 1007 of this title.
Such filing shall constitute a representation by the person who
executes the agreement that the facts s tated in the certificate
remain true immediately prior to such filing.
SECTION 12. AMENDATORY 18 O.S. 2011, Section 1082, as
amended by Section 23, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1082), is amended to read as follows:
Section 1082.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS;
SERVICE OF PROCESS UPON SURVI VING OR RESULTING CORPORATION
A. Any one or more domestic corporations of this state may
merge or consolidate with one or more other corporations of any
other state or states of the United States, or of the District of
Columbia, if the law s of the other state or states or of the
District permit a corporation of the jurisdiction to merge or
consolidate with a corporation of another jurisdiction foreign
corporations, unless the laws of the jurisdiction or jurisdict ions
under which such foreig n corporation or corporations are organized
prohibit the merger or consolidation. The constituent corporations
may merge into a single surviving corporation, which may be any one
of the constituent corporations, o r they may consolidate into a new
resulting corporation formed by the consolidation, which may be a
corporation of the state of incorporation jurisdiction of
organization of any one of the constituent corporations , pursuant to
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an agreement of merger or consolidation, as the case may be,
complying and approved in accordance with the provisions of this
section. In addition, any one or more corporations organized under
the laws of any jurisdiction other than one of t he United States may
merge or consolidate with one or mor e corporations existing u nder
the laws of this state if the surviving or resulting cor poration
will be a corporation of this state, and if the laws under which the
other corporation or corporations a re formed permit a corporation of
that jurisdiction to me rge or consolidate with a corporation of
another jurisdiction.
B. All the constituent corporations shall enter into an
agreement of merger or consolidation. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. In the case of a merger in which the survivi ng corporation
is a domestic corporation, such amendments or changes in the
certificate of incorpo ration of the surviving corporation as are
desired to be effected by the merger, which amendments or changes
may amend and restate the certificate of incorpor ation of the
surviving corporation in its entirety, or, if no such amendments or
changes are desired, a statement that the certificate of
incorporation of the surviving corporation shall be its certificate
of incorporation;
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4. In the case of a consolidati on in which the resulting
corporation is a domestic corporation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the agreement;
5. The manner, if any, of converting the shares of each of the
constituent corporations into shares or other securities of the
corporation surviving or resulting f rom the merger or consolidation,
or of canceling some or all of the shares, and , if any shares of any
of the constituent corporations are not to remain outs tanding, to be
converted solely into shares or other securities of the surviving or
resulting corporation or to be canceled, the cash, property, rights ,
or securities of any other corporation or entity which t he holder of
the shares is to receive in exchan ge for, or upon conversion of, the
shares and the surrender of any certificates evidencing them, whi ch
cash, property, rights, or securities of any other corporation or
entity may be in addition to or in lieu of the shares or other
securities of the surviv ing or resulting corporation;
4. 6. Other details or provisions as are deemed desirable,
including, without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance o r
recognition of fractional shares, rights or other securities of the
surviving or resulting corporation or of any other corporation or
entity, the shares, rights or other securities of which are to be
received in the merger or consolidation, or for some oth er
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arrangement with respect thereto consistent with the provisions of
Section 1036 of this title; and
5. 7. Other provisions or facts as shall be required to be set
forth in the certificate of incorporation by the laws of the state
which are stated in the agreement to be the laws that shall govern
the an agreement of merger or consolidation including any provision
for amendment of the certificate of incorp oration or equivalent
document of a surviving or resulting corporation and that can be
stated in the case of a merger or consolidation. Any o f the terms
of the agreement of merger or consolidation may be made dependent
upon facts ascertainable outside of the agreement; provided, that
the manner in which th e facts shall operate upon the terms of the
agreement is clearly and expressly set forth i n the agreement of
merger or consolidation. The term “facts” as used in this
paragraph, includes, but is not l imited to, the occurrence of any
event, including a determination or action by any person or body ,
including the corporation.
C. The agreement shall be adopted, approved, executed, and
acknowledged by each of the constituent corporations in accordance
with the laws under which it is formed organized, and, in the case
of an Oklahoma a domestic corporation, in the same manner as is
provided for in Section 1081 of this title. The agreement shall be
filed and shall become effective for all purposes of the laws of
this state when and as provided for in Se ction 1081 of this title
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with respect to the merger or cons olidation of domestic corporations
of this state. In lieu of filing the agreement of merger or
consolidation, the surviving or resulting corporation may file a
certificate of merger or consolidation execut ed in accordance with
the provisions of Section 1007 of this title, which states:
1. The name and state jurisdiction of incorporation
organization of each of the constituent corporations;
2. That an agreement of merger or consolidation has been
approved, adopted, executed, and acknowledged by each of th e
constituent corporations in accordance with the provisions of this
subsection;
3. The name of the surviving or resulting corporation;
4. In the case of a merger in which the surviving corporation
is a domestic corporation , the amendments or changes in the
certificate of incorporation of t he surviving corporation, which may
be amended and restated, that are effected by the merger, which
amendments or changes may amend and restate the certificate of
incorporation of the surviving corporation in its entire ty, or, if
no amendments or changes a re desired, a statement that the
certificate of incorporation of the surviving corporation shall be
its certificate of incorporation;
5. In the case of a consolidation in which the resulting
corporation is a domestic c orporation, that the certificate of
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incorporation of the resulting corporation shall be as is set forth
in an attachment to the certificate;
6. That the executed agreement of consolidation or merger is on
file at the principal place of business o f the surviving or
resulting corporation, and the address thereof;
7. That a copy of the agreement of consolidation or merger will
be furnished by the surviving or resulting corporation, on request
and without cost, to any shareholder of any constituent corporatio n;
8. If the corporation surviving or r esulting from the merger or
consolidation is to be a domestic corporation, the authorized
capital stock of each c onstituent corporation which is not a
domestic corporation; and
9. The agreement, if any, required by the provisions of
subsection D of this s ection. For purposes of Section 1085 of this
title, the term “shareholder” in subsection D of this section shall
be deemed to include “member”.
D. If the corporation surviving or resulting from the merger or
consolidation is to be governed by the laws of the District of
Columbia or any state other than this state a foreign corporation,
it shall agree that it may be served with process in this state in
any proceeding for enforcement of any obligation of any constitue nt
corporation of this state, as well a s for enforcement of any
obligation of the surviving or resulting corporation arising from
the merger or consolidation, including any suit or other proceeding
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to enforce the right of any shareholders as determined in appraisal
proceedings pursuant to the p rovisions of Section 1091 of this
title, and shall irrevocably appoint the Secretary of State as its
agent to accept service of process in any suit or other proceedings
and shall specify the address to which a copy of process shall be
mailed by the Secreta ry of State. In the event of service upon the
Secretary of State in accordance with the provisions of Section 2004
of Title 12 of the Oklahoma Statutes, the Secretary of State shall
immediately notify the surviving o r resulting corporation thereof by
letter, certified mail, return receipt requested, directed to the
surviving or resulting corporation at the add ress specified unless
the surviving or resulting corporation shall have designated in
writing to the Secretary of State a different address for this
purpose, in which case it shall be mailed to the last address so
designated. The notice shall include a co py of the process and any
other papers served on the Secretary of State pursuant to the
provisions of this sub section. It shall be the duty of the
plaintiff in the event of such service to serve process and any
other papers in duplicate, to notify the Sec retary of State that
service is being effected pursuant to the provisions of this
subsection, and to pay the S ecretary of State the fee provided for
in paragraph 7 of subsection A of Section 1142 of this title, which
fee shall be taxed as part of the costs in the proceeding. The
Secretary of State shall maintain an alphabetical record of any such
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service setting forth the name of the plaintiff and the defendant,
the title, docket number, and nature of the proceeding in which
process has been served upon th e Secretary of State, the fact that
service has been effected pursuant to the provisions of this
subsection, the return date thereof, and the date se rvice was made.
The Secretary of State shall not be required to retain such
information longer than five ( 5) years from receipt of the service
of process by the Secretary of State.
E. The provisions of subsection D of Section 1081 of this title
shall apply to any merger or consolidation pursuant to the
provisions of this section. The provisions of subsection E of
Section 1081 of this title shall apply to a merger pursuant to the
provisions of this section in which t he surviving corporation is a
domestic corporation of this state. The provisions of subsections F
and H of Section 1081 of this title shall apply to any merger
pursuant to the provisions of this section.
SECTION 13. AMENDATORY Sec tion 24, Chapter 323, O.S.L.
2017 (18 O.S. Supp. 2020, Section 1083.1), is amended to read as
follows:
Section 1083.1.
MERGER OF PARENT ENTITY AND SUBSIDIARY
CORPORATION OR CORPORATIONS
A. In any case in which:
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1. At least ninety percent (90%) of the outstanding shares of
each class of the stock of a corporation or corporations, other
than a corporation which has in its certificate of incorporation
the provision required by division (1) of subparagraph g of
paragraph 1 of subsection G of Section 1081 of Title 18 of the
Oklahoma Statutes this title, of which class there are outstanding
shares that, absent this subsection, would be entitled to vote on
such merger, is owned by an entity; and
2. One or more of such corporations is a domestic
corporation of this state; and
3. Any entity or corporation that is not an entity or
corporation of this state is an entity or corporation of any
other state or the District of Columbia, the laws of which do not
forbid such merger. Unless the laws of the jurisdiction or
jurisdictions under which such entity or such foreign corporations
are formed or organized prohibit such merger, the entity having such
stock ownership may either merge the corporation or corporations
into itself and assume all of its or their obligations, or merge
itself, or itself and one or more of such corporations, into one
of the other corporations by:
a. authorizing such merger in accordance with such
entity’s governing documents and the laws of the
jurisdiction under which such entity is formed or
organized, and
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b. acknowledging and filing with the Secretary of
State, in accordance with Section 1007 of Title 18
of the Oklahoma Statutes this title, a certificate of
such ownership and merger certifying:
(1) that such merger was authorized in accordance
with such entity’s governing documents and the
laws of the jurisdiction under which such
entity is formed or organized, such certificate
executed in accordance with such entity’s
governing documents and in accordance with the
laws of the jurisdiction under which such
entity is formed or organized, and
(2) the type of entity of each constituent entity
to the merger; provided, however, that in case
the entity shall not own all the outstanding
stock of all the corporations, parties to a
merger as aforesaid:
(a) the certificate of ownership and merger
shall state the terms and conditions of
the merger, including the securities,
cash, property, or rights to be issued,
paid, delivered or granted by the
surviving constituent party upon
surrender of each share of the
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corporation or corporations not owned by
the entity, or the cancellation of some or
all of such shares, and
(b) such terms and conditions of the merger
may not result in a holder of stock in a
corporation becoming a general partner in
a surviving entity that is a partnership,
other than a limited liability partnership
or a limited liability limited
partnership.
Any of the terms of the merger may be made dependent upon facts
ascertainable outside of the certificate of owners hip and merger,
provided that the manner in which such facts shall oper ate upon the
terms of the merger is clearly and expressly set forth in the
certificate of owner ship and merger. The term “facts”, as used in
the preceding sentence, includes, but is not limited to, the
occurrence of any event including a determination or action by any
person or body, including the entity. If the surviving constituent
party exists under the laws of the District of Columbia or any state
or is an entity formed or organized under the laws of a jurisdiction
other than this state, subsection D of Section 1082 of Title 18 of
the Oklahoma Statutes this title shall also apply to a merger under
this section; if the surviving constituent party is the enti ty, the
word “corporation” where applicable, as used in s ubsection D of
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Section 1082 of Title 18 of the Oklahoma Statutes this title, shall
be deemed to include an entity as defined herein; and the terms and
conditions of the merger shall obligate the surviving const ituent
party to provide the agreement, and tak e the actions required by
subsection D of Section 1082 of Title 18 of the Oklahoma Statutes
this title.
B. Sections 1088, 1090 and 1127 of Title 18 of the Oklahoma
Statutes this title shall, insofar as they are applicable, apply to
a merger under this sec tion, and Section 1089 and subsection E of
Section 1081 of Title 18 of the Oklahoma Statutes this title shall
apply to a merger under this sec tion in which the surviving
constituent party is a corporation of this state. For purposes of
this subsection, references to “agreement of merger” in subsection F
of Section 1081 of Title 18 of the Oklahoma Statutes this title
shall mean the terms and con dition of the merger set forth in the
certificate of owner ship and merger, and references to “corporation”
in Sections 1088, 1089, and 1090 of Title 18 of the Oklahoma
Statutes this title and Section 1127 of Title 18 of the Oklahoma
Statutes this title shall be deemed to include the entity, as
applicable. Section 1091 of Title 18 of the Oklahoma Statutes this
title shall not apply to any merger effected under this section,
except as provided in subsection C of this section.
C. In the event all of the stock of an Oklahoma a domestic
corporation party to a merger effected under this section is not
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owned by the entity immediately prior to the merger, the
shareholders of such Oklahoma domestic corporation party to the
merger shall have appraisal rights as set forth in Section 1091 of
Title 18 of the Oklahoma Statutes this title.
D. A merger may be effected under this section although one or
more of the constituent parties is a corporation organized under
the laws of a jurisdiction other than one of the United States,
provided that the laws of such jurisdiction do not forbid such
merger.
E. As used in this section only, the term:
1. “Constituent party” means an entity or corporation to be
merged pursuant to this section;
2. “Entity” means a partnership, whether general or limited,
and including a limited liability partnership and a limited
liability limited partnership, a limited liability company, and
any unincorporated nonprofit or for-profit association, trust or
enterprise having members or having outstanding shares of stock
or other evidences of financial, beneficial or membership
interest therein, whether formed by agreement or under statutory
authority or otherwise and whether formed or organized under the
laws of this state or the laws of any other juri sdiction; and
3. “Governing documents” means a partnership agreement,
operating agreement, articles of association or any other
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instrument containing the provisions by which an entity is
formed or organized.
SECTION 14. AMENDATORY 18 O.S. 20 11, Section 1090.3, as
amended by Section 25, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 1090.3), is amended to read as follows:
Section 1090.3.
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
A. Notwithstanding any other provisions of this title, a
corporation shall not engage in any business com bination with any
interested shareholder for a period of three (3) years following the
time that the person became an interested shareholder, unless:
1. Prior to that time, the board of directors of the
corporation approved either the business combination or the
transaction which re sulted in the person becoming an interested
shareholder;
2. Upon consummation of the transaction which resulted in the
person becoming an interested shareholder, the inte rested
shareholder owned at least eighty -five percent (85%) of the
outstanding voting stock of the corporation at the time the
transaction commenced, excluding for purposes of determining the
outstanding voting stock, but not the outstanding voting stock o wned
by the interested shareholder, those shares owned by :
a. persons who are directo rs and also officers, and
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b. employee stock plans in which employee participants do
not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a
tender or exchange offer; or
3. At or subsequent to such time, the business combination is
approved by the board of directors and authorized at an annual or
special meeting of shareholders, and not by written consent, by the
affirmative vote of at least two-thirds (2/3) of the outstanding
voting stock which is not ow ned by the interested shareholder.
B. The restrictions contained in this section shall not apply
if:
1. The corporation’s original certificate of incorporation
contains a provision expressly electing not to be governed by this
section;
2. The corporation, by action of its board of directors,
adopted an amendment to its bylaws by November 30, 1991, expressly
electing not to be governed by this section, which amendment sha ll
not be further amended by the board of directors;
3. a. The corporation, with the approval of its shareholders,
adopts an amendment to its certificate of incorporation
or bylaws expressly electing not to be governed by this
section; provided that, in a ddition to any other vote
required by law, an amendment t o the certificate of
incorporation or bylaws must be approved adopted by the
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affirmative vote of a majority of the outstanding
voting stock of the corporation.
b. An amendment adopted pursuant to thi s paragraph shall
be effective immediately in In the case of a
corporation that both:
(1) has never had a class of voting stock that falls
within any of the three two categories set out in
paragraph 4 of this subsection, and
(2) has not elected by a provis ion in its original
certificate of incorporation or any amendment
thereto to be governed by this sec tion, such
amendment shall become effective upon (i) in the
case of an amendment to the certificate of
incorporation, the date and time at which t he
certificate filed in accordance with Section 1007
of this title becomes effective, or (ii) in the
case of an amendment to the bylaws, the date of
the adoption of such amendment.
c. In all other cases, an amendment adopted pursuant to
this paragraph shall not be become effective until (i)
in the case of an amendment to the certificate of
incorporation, twelve (12) months after the adoption
of the amendment and date and time at which the
certificate filed in accordance with Section 1007 of
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this title becomes effecti ve, or (ii) in the case of
an amendment to the bylaws, twelve (12 ) months after
the date of the adoption of such amendment, and in
either case, the election not to be governed by this
section shall not apply to any business combination
between a corporation and any person who became an
interested shareholder of the corp oration on or prior
to the adoption before (i) in the case of an amendment
to the certificate of incorporation, the date and time
at which the certificate filed in accordance with
Section 1007 of this title becomes effective, or (ii)
in the case of an amendment to the bylaws, the date of
the adoption of such amendment. A bylaw amendment
adopted pursuant to this paragraph shall not be
further amended by the board of directors;
4. The corporation does not have a class of voting stock that
is:
a. listed on a national securities exchange, or
b. held of record by one thousand or more shareholders,
unless any of the foregoing results from action taken,
directly or indirectly, by an interested share holder
or from a transaction in which a person becomes an
interested shareholder;
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5. A person becomes an interested shareholder inadvertently
and:
a. as soon as practicable divests itself of ownership of
sufficient shares so that the person ceases to be a n
interested shareholder, and
b. would not, at any time within the three-year period
immediately prior to a business combination between
the corporation and the person, have been an
interested shareholder but for the inadvertent
acquisition;
6. a. The business combination is proposed prior to the
consummation or abandonment of, and subsequent to the
earlier of the public announcement or the notice
required hereunder of, a proposed transaction which:
(1) constitutes one of the transactions described in
subparagraph b of this paragraph,
(2) is with or by a perso n who:
(a) was not an interested shareholder dur ing the
previous three (3) years, or
(b) became an interested shareholder with the
approval of the corporation’s board of
directors or during the period described in
paragraph 7 of this subsection, and
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(3) is approved or not opposed by a majority of the
members of the board of directors then in office,
but not less than one, who were directors prior
to any person becoming an interested shareholder
during the previous three (3) years or were
recommended for election or elected to succeed
the directors by a m ajority of the directors.
b. The proposed transactions referred to in subparagraph
a of this paragraph are limited to:
(1) a share acquisition pursuant t o Section 1090.1 of
this title, or a merger or consolid ation of the
corporation, except for a merger in respect of
which, pursuant to subsection F or G of Section
1081 of this title, no vote of the shareholders
of the corporation is required,
(2) a sale, lease, exchange, mortgage, pledge,
transfer, or other di sposition, in one
transaction or a series of tra nsactions, whether
as part of a dissolution or otherwise, of assets
of the corporation or of any direct or indirect
majority-owned subsidiary of the corp oration,
other than to any direct or indirect wholly ow ned
subsidiary or to the corporation, having an
aggregate market value equal to fifty percent
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(50%) or more of either the aggregate market
value of all of the assets of the corporation
determined on a consolidated basis or the
aggregate market value of all the outstanding
stock of the corporation, or
(3) a proposed tender or exchange offer for
outstanding stock of the corporation which
represents fifty percent (50%) or more of the
outstanding voting sto ck of the corporation. The
corporation shall give not less than twenty (20)
days’ notice to all intere sted shareholders prior
to the consummation of any of the transactions
described in divisions (1) or (2) of this
subparagraph; or
7. The business combin ation is with an interested shareholder
who became an interested shareholder at a time when the restric tion
contained in this section did not apply by reason of any of
paragraphs 1 through 4 of this subsection; provided, however, that
this paragraph shall not apply if, at the time the interested
shareholder became an interested shareholder, the corporation ’s
certificate of incorporation contained a provision authorized by
subsection C of this section.
C. Notwithstanding paragraphs 1, 2, 3 and 4 of subsecti on B of
this section, a corporation may elect by a prov ision of its original
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certificate of incorporati on or any amendment thereto to be governed
by this section; provided, that any amendment to the certificate of
incorporation shall not apply to restrict a business combination
between the corporation and an i nterested shareholder of the
corporation if the interested shareholder became an interested
shareholder prior to the effective date of the amendment before the
date and time at which the certif icate filed in accordance with
Section 1007 of this title becomes ef fective.
D. As used in this section:
1. “Affiliate” means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by,
or is under common control wi th, another person;
2. “Associate”, when used to indicate a relati onship with any
person, means:
a. any corporation, partnership, unincorporated
association, or other entity of which the person is a
director, officer, or partner or is the owner of
twenty percent (20%) or more of any class of voting
stock,
b. any trust or other estate in which the person has at
least a twenty-percent beneficial int erest or as to
which such person serves as trustee or in a similar
fiduciary capacity, and
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c. any relative or spouse of the person, or any relative
of the spouse, who has the sam e residence as the
person;
3. “Business combination”, when used in reference to any
corporation and any interested shareholder of the corporation,
means:
a. any merger or consolidation of the corporation or any
direct or indirect majority-owned subsidiary of the
corporation with:
(1) the interested shareholder, or
(2) any other corporation, partnership,
unincorporated association, or other entity if
the merger or consolidation is caused by the
interested shareholder and, as a result of the
merger or consolidation subsection A of this
section is not applicable to the surviving
entity,
b. any sale, lease, exchange, mortgage, pledge, transfer,
or other disposition, in one transaction or a serie s
of transactions, except proportionately as a
shareholder of the c orporation, to or with the
interested shareholder, whether as part of a
dissolution or otherwise, of assets of the corporation
or of any direct or indirect majority-owned subsidiary
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of the corporation which assets have an aggregate
market value equal to te n percent (10%) or more of
either the aggregate market value of all the assets of
the corporation determined on a consolidated basis or
the aggregate market value of all the outstanding
stock of the corporation,
c. any transaction which results in the issu ance or
transfer by the corporation or by any direct or
indirect majority-owned subsidiary of the corporation
of any stock of the corporation or of the subsidiary
to the interested sharehol der, except:
(1) pursuant to the exercise, exchange, or conversion
of securities exercisable for, exchang eable for,
or convertible into stock of the corporation or
any subsidiary which securities were outstanding
prior to the time that the interested share holder
became an interested shareholder,
(2) pursuant to a merger u nder subsection G of
Section 1081 of this title,
(3) pursuant to a dividend or distribution paid or
made, or the exercise, exchange, or conversion of
securities exercisable for, exchangeabl e for, or
convertible into stock of the corporation or any
subsidiary which security is distributed, pro
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rata, to all holders of a class or serie s of
stock of the corporation subsequent to the time
the interested shareholder became an interested
shareholder,
(4) pursuant to an exchange offer by the corporation
to purchase stock made on the same terms to all
holders of the stock, or
(5) any issuance or transfer of stock by the
corporation; provided, however, that in no case
under divisions (3) through (5) of this
subparagraph shall there be an increase in the
interested shareholder’s proportionate share of
the stock of any class or series of the
corporation or of the voting stock of the
corporation,
d. any transaction involving the corporation or any
direct or indirect majority-owned subsidiary of the
corporation which has t he effect, directly or
indirectly, of increasing the proportionate share of
the stock of any class or series, or securities
convertible into the stock of any class or series, or
the outstanding voting stock, of the corporation or of
any subsidiary which is owned by the interested
shareholder, except as a result of immaterial changes
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due to fractional share adjustments or as a result of
any purchase or redemption of any shares of stock not
caused, directly or indirectly, by the interested
shareholder,
e. any receipt by the interested shareholder of the
benefit, directly or indirectly, except
proportionately as a shareholder of the corporation,
of any loans, advances, guarantees, pledges, or ot her
financial benefits, other than those expressly
permitted in subparagraphs a through d of this
paragraph, provided by or through the corporati on or
any direct or indirect majority-owned subsidiary, or
f. any share acquisition by the interested sharehold er
from the corporation or any direct or indirect
majority-owned subsidiary of the corporation pursuant
to Section 1090.1 of this title;
4. “Control”, including the terms “controlling”, “controlled
by” and “under common control with”, means the possession , directly
or indirectly, of the power to direct or cause the direc tion of the
management and policies of a person, whether through the ownership
of voting stock, by contract, or otherwise. A person who is the
owner of twenty percent (20%) or more of the outstanding voting
stock of any corporation, partnership, unincorpo rated association or
other entity shall be presumed to have control of the ent ity, in the
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absence of proof by a preponderance of the evidence to the contrary.
Notwithstanding the foregoing , a presumption of control shall not
apply where the person holds s tock, in good faith and not for the
purpose of circumventing this section, as an agent, bank, broker,
nominee, custodian, or trustee for one or more owners who do not
individually or as a g roup have control of the entity;
5. a. “Interested shareholder ” means:
(1) any person, other than the co rporation and any
direct or indirect maj ority-owned subsidiary of
the corporation, that:
(a) is the owner of fifteen percent (15%) or
more of the outstanding voting stock of the
corporation, or
(b) is an affiliate or a ssociate of the
corporation and was th e owner of fifteen
percent (15%) or more of the outstanding
voting stock of the corporation at any time
within the three-year period immediately
prior to the date on which it is sought to
be determined whether the pers on is an
interested shareholder, and
(2) the affiliates and associates of the person.
b. “Interested shareholder” shall not mean:
(1) any person who:
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(a) owned shares in excess of the fifte en
percent (15%) limitation set forth herein as
of, or acquired such shares pursuant to a
tender offer commenced prior to, September
1, 1991, or pursuant to an exchange offer
announced prior to September 1, 1991, and
commenced within ninety (90) days there after
and either:
i. continued to own shares in excess of
the fifteen percent (15%) limitation or
would have but for action by the
corporation, or
ii. is an affiliate or associate of the
corporation and so continued, or so
would have continued but for acti on by
the corporation, to be the owner of
fifteen percent (15%) or more of the
outstanding voting stock o f the
corporation at any time within the
three-year period immediately prior to
the date on which it is sought to be
determined whether the person is a n
interested shareholder, or
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(b) acquired the shares from a person described
in subdivision (a) of this d ivision by gift,
inheritance, or in a tr ansaction in which no
consideration was exchanged, or
(2) any person whose ownership of shares in excess of
the fifteen percent (15%) limitation set forth
herein is the result of action taken solely by
the corporation; provided, that the person shall
be an interested shareholder if thereafter the
person acquires additional shares of voting stock
of the corporation, except as a result of further
corporate action not caused, directl y or
indirectly, by the person.
c. For the purpose of determining whether a pe rson is an
interested shareholder, the stock of the corporation
deemed to be outstanding shall include stock de emed to
be owned by the person through application of
paragraph 9 of this subsection, but shall not inclu de
any other unissued stock of the corpo ration which may
be issuable pursuant to any agreement, arrangement, or
understanding, or upon exercise of conv ersion rights,
warrants, or options, or otherwise;
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6. “Person” means any individual, corporation, partne rship,
unincorporated association, any o ther entity, any group and any
member of a group;
7. “Stock” means, with respect to any corporation, capital
stock and, with respect to any other entity, any equity interest;
8. “Voting stock” means, with respect t o any corporation, stock
of any class or series entitled to vote generally in the election of
directors and, with respect to any entity that is not a c orporation,
any equity interest entitled to vote generally in the e lection of
the governing body of the e ntity. Every reference to a percentage
of voting stock refers to the percentage of the votes of the voting
stock; and
9. “Owner”, including the terms “own” and “owned”, when used
with respect to any stock, means a pe rson who individually or with
or through any of its affiliates or associates:
a. beneficially owns the stock, directly or indirectly,
or
b. has:
(1) the right to acquire the stock, whether the right
is exercisable immediately or only after the
passage of time, pursuant to any agreement,
arrangement, or understanding, or upon the
exercise of conversion rights, exchange rights,
warrants, or options, or otherwise; provided,
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however, that a pers on shall not be deemed the
owner of stock tendered pursuant to a te nder or
exchange offer made by the per son or any of the
person’s affiliates or associates until the
tendered stock is accepted for purchase or
exchange, or
(2) the right to vote the stock p ursuant to any
agreement, arrangement, or understanding;
provided, however, that a person shall not be
deemed the owner of any stock because of t he
person’s right to vote the stock if the
agreement, arrangement, or understanding to vote
the stock arises solely from a revocable proxy or
consent given in response to a proxy or consent
solicitation made to ten o r more persons, or
c. has any agreement, arrangement, or understanding for
the purpose of acquiring, holding, or voting, except
voting pursuant to a re vocable proxy or consent as
described in division (2) of subparagra ph b of this
paragraph, or disposing o f the stock with any other
person that beneficially owns, or whose affiliates or
associates beneficially own, directly or indirectly,
the stock.
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E. No provisions of a certificate of incorporation or bylaw
shall require, for any vote of shareholders requir ed by this
section, a greater vote of sh areholders than that specified in this
section.
SECTION 15. AMENDATORY 18 O.S. 2011, Section 1090.4, as
amended by Section 23, Chapter 88, O.S.L. 2019 (18 O.S. Supp. 2020,
Section 1090.4), is amended to read as follows:
Section 1090.4.
CONVERSION OF AN ENTITY TO A DOMESTIC CORPORATION
A. As used in this section, the term “entity” means a domestic
or foreign partnership, whether general or limited , and including a
limited liability partnership and a limited liability limited
partnership, a foreign corporation including a public benefit
corporation, a domestic or foreign limited liability comp any,
including a public benefit limited liability company, and any
unincorporated nonprofit or for -profit association, trust or
enterprise having members or having outstanding shares of stock or
other evidences of financ ial, beneficial or membership intere st
therein, whether formed by agreement or under statutory authority or
otherwise and whether formed or organized under the laws of this
state or the laws of any other jurisdiction.
B. Any entity may convert to a domest ic corporation by
complying with subsection G of this section and filing in the office
of the Secretary of State a certificate of conversion that has been
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executed in accordance with subsec tion H of this section and filed
in accordance with Section 1007 of this title, to which shall be
attached, a certificate of incorporation that has been prepared,
executed and acknowledged in accordance with Section 1007 of this
title. Each of the certifi cates required by this subsection shall
be filed simultaneously in the office of the Secretary of State .
C. The certificate of conversion to a corporation shall state:
1. The date on which the entity was f irst formed;
2. The name, jurisdiction of format ion or organization, and
type of entity of the entity when f ormed and, if changed, its name ,
jurisdiction and type of entity immediately before the filing of the
certificate of conversion;
3. The name of the corporation as set forth in its certificate
of incorporation filed in accordance with subsection B of this
section; and
4. The future effective date or time, which shall be a date or
time certain not later than ninety (90) days after the filing, of
the conversion to a corporation if the conversion is not to be
effective upon the filing of the certificate of conversio n and the
certificate of incorporati on provides for the same future effective
date as authorized in subsection D of Section 1007 of this tit le.
D. Upon the effective date or time of the ce rtificate of
conversion and the certificate of incorporation, the e ntity shall be
converted to a domest ic corporation and the corporation shall
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thereafter be subject to all of the provisions of this title, e xcept
that notwithstanding Section 1007 of this t itle, the existence of
the corporation shall be deemed to have comm enced on the date the
entity commenced its existence.
E. The conversion of any entity to a domestic corporation shall
not be deemed to affe ct any obligations or liabilities of the entity
incurred before its conversion to a domestic corporation or the
personal liability of any person incurre d before such conversion.
F. When an entity has converted to a domestic corporation under
this section, the domestic corporation shall be deemed to be t he
same entity as the converting entity. All of the rights, privil eges
and powers of the entity that h as converted, and all property, real,
personal and mixed, and all debts due to the entity, as well as al l
other things and causes of action belonging to the entity, shall
remain vested in the domestic corporation to whic h the entity has
converted and shall be the property of the domestic corporation and
the title to any real property vested by deed or otherw ise in the
entity shall not revert or be in any w ay impaired by reason of the
conversion; but all rights of creditor s and all liens upon any
property of the entity shall be preserved unimpaired, and all debts,
liabilities and duties of the entity that has converted shall remain
attached to the domestic c orporation to which the entity has
converted, and may be enforced a gainst it to the same extent as if
said the debts, liabilities and duties had originally been incurred
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or contracted by it in its capacity a s a domestic corporation. The
rights, privileges, po wers and interests in property of the entity,
as well as the debts, liabilities and duties of the entit y, shall
not be deemed, as a consequence of the conversion, to have been
transferred to the domestic corporation to which the entity has
converted for any purpose of the laws of this state.
G. Unless otherwise agreed or otherwise provided by any laws of
this state applicable to the converting entity, the converting
entity shall not be required to wind u p its affairs or pay its
liabilities and distribute i ts assets, and the conversion shall not
be deemed to constitute a d issolution of such entity and shall
constitute a continuation of the existence of the converting entity
in the form of a domestic corpor ation.
H. Before filing a certificate of conversion with the Secretary
of State, the conversion shall be approved in th e manner provided
for by the document, instrument, agreement or other writing, as the
case may be, governing the internal affairs of the entity and the
conduct of its business or by applica ble law, as appropriate, and a
certificate of incorporation shall b e approved by the same
authorization required to approve the conversion.
I. The certificate of conversion to a corporation shall be
signed by an officer, director, trustee, manager, partne r, or other
person performing functions equivalent to those of an o fficer or
director of a domestic cor poration, however named or described, and
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who is authorized to sign the certificate of conversion on behalf of
the entity.
J. In a conversion of an enti ty to a domestic corporation under
this section, rights or securiti es of, or memberships or membership,
economic or ownership interests in, the entity which is to be
converted to a domestic corporation m ay be exchanged for or
converted into cash, property , or shares of stock, rights or
securities of the domestic corporati on or, in addition to or in lieu
thereof, may be exchanged for or converted into cash, property , or
shares of stock, rights or securitie s of or interests in another
domestic corporation or entity or may be canceled.
SECTION 16. AMENDATORY 18 O.S. 2011, Section 1090.5 , as
amended by Section 24, Chapter 88, O.S.L. 2019 (18 O.S. Supp. 2020,
Section 1090.5), is amended to read as follows:
Section 1090.5.
CONVERSION OF DOMESTIC CORPORATION TO AN ENTITY
A. A domestic corporation may, upon the authorization of such
conversion in accordance with this section, convert to an entity.
As used in this section, the term “entity” means a domestic or
foreign partnership, whether general or limited, and including a
limited liability partnership and a limited liability limited
partnership, a foreign corporation including a public benefit
corporation, a domestic or foreign limited liability company
including a public benefit limited liability company , and any
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unincorporated nonprofit or for -profit association, trust or
enterprise having members or having outstanding shares of stock or
other evidences of financial, beneficial or membe rship interest
therein, whether formed by agreement or under statutory authority or
otherwise and whether form ed or organized under the laws of this
state or the laws of any other jurisdiction.
B. The board of directors of the corporation which desires to
convert under this section shall adopt a resolution approving such
conversion, specifying the type of entity into which the corporation
shall be converted and recommending the approval of the conversion
by the shareholders of the corporation. The resolut ion shall be
submitted to the shareholders of the corporation at an annual or
special meeting. Due notice of the time, and purpose of the meeting
shall be mailed to each holder of shares, whether voting or
nonvoting, of the corporation at the address of t he shareholder as
it appears on the records of the corporation, at least twenty (20)
days prior to the date of the meeting. At the meeting, the
resolution shall be considered and a vote taken for its adoption or
rejection. The corporation adopts the conv ersion if all outstanding
shares of stock of the corporation, whether voting or nonvoting, are
voted for the resolution.
C. If the governing act of the do mestic entity to which the
corporation is converting does not provide for the filing of a
conversion notice with the Secretary of State or the corporation is
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converting to a foreign entity, the corporation shall file with the
Secretary of State a certifica te of conversion executed in
accordance with Section 1007 of this title which certifies:
1. The name of the corporation and, if it has been changed, the
name under which it was originally incorporated;
2. The date of filing of its original certificate of
incorporation with the Secretary of State;
3. The name of the entity to which the corporation shall be
converted, its jurisdiction of formation if a foreign entity, and
the type of entity;
4. That the convers ion has been approved in accordance with the
provisions of this section;
5. The future effective date or time of the conversion to an
entity, which shall be a date or time certain not later than ninety
(90) days after the filing, if it is not to be effect ive upon the
filing of the certificate of con version;
6. The agreement of the foreign entity that it may be served
with process in this state in any action, suit or proceeding for
enforcement of any obligation of the foreign entity arising while it
was a domestic corporation and that it irrevocably appoints the
Secretary of State as its agent to accept service of process in any
such action, suit or proceeding;
7. The address to which a copy of the process referred to in
this subsection shall be mailed by the Secretary of State. In the
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event of such service upon the Secretary of State in accordance with
the provisions of Section 2004 of Title 12 of the Oklahoma Statutes,
the Secretary of State shall immediately notify such corporation
that has converted ou t of the State of Oklahoma by letter, certifi ed
mail, return receipt requested, directed to the corporation at the
address specified unless the co rporation shall have designated in
writing to the Secretary of State a different address for this
purpose, in which case it shall be mailed to the last add ress so
designated. The notice shall include a copy of the process and any
other papers served on th e Secretary of State pursuant to the
provisions of this subsection. It shall be the duty of the
plaintiff in the event of such service to serve process an d any
other papers in duplicate, to notify the Secretary of State that
service is being effected purs uant to the provisions of this
subsection, and to pay the Secretary of State the fee provided for
in paragraph 7 of Section 1142 of this title, which fee s hall be
taxed as part of the costs in the proceeding. The Secretary of
State shall maintain an alpha betical record of any such service
setting forth the name of the plaintiff and the defendant, the
title, docket number, and nature of the proceeding in whi ch process
has been served upon the Secretary of State, the fact that service
has been effected pursu ant to the provisions of this subsection, the
return date thereof, and the date service was made. The Secreta ry
of State shall not be required to retain s uch information longer
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than five (5) years from receipt of the service of process by the
Secretary of State; and
8. If the entity to which the corporation is converting was
required to make a filing with the Se cretary of State as a condition
of its formation, the type and date of such filing.
D. Upon the filing of a conversion notice with the Secretary of
State, whether under subsection C of this section or under the
governing act of the domestic entity to whic h the corporation is
converting, the filing o f any formation document required by the
governing act of the domestic entity to which the corporatio n is
converting, and payment to the Secretary of State of all prescribed
fees, the Secretary of State shall ce rtify that the corporation has
filed all documents and paid all required fees, and thereupon the
corporation shall cease to exist as a domestic co rporation at the
time the certificate of conversion becomes effective in accordance
with Section 1007 of this title. The certificate of the Secretary
of State shall be prima facie evidence of the conversion by the
corporation.
E. The conversion of a corp oration under this section and the
resulting cessation of its existence as a domestic corporation shall
not be deemed to affect any obligations or liabilit ies of the
corporation incurred before such conversion or the personal
liability of any person incurr ed before the conversion, nor shall it
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be deemed to affect the choice of law applicable to the corporation
with respect to matters arising before the conve rsion.
F. Unless otherwise provided in a resolution of conversion
adopted in accordance with this se ction, the converting corporation
shall not be required to wind up its affairs or pay its liabilities
and distribute its assets, and the conversion shall n ot constitute a
dissolution of such corporation.
G. In a conversion of a domestic corporation to an entity under
this section, shares of stock of the converting domestic corporation
may be exchanged for or conv erted into cash, property, rights or
securities of, or memberships or membership, economic or ownership
interests in, the entity to which the dome stic corporation is being
converted or, in addition to or in lieu thereof, may be exchanged
for or converted into cash, property, shares of stock, rights o r
securities of, or interests in, another corporation or entity or may
be canceled.
H. When a corporation has converted to an entity under this
section, the entity shall be deemed to be the same entity as the
corporation. All of the rights, privileges an d powers of the
corporation that has converted, and all property, real, personal and
mixed, and all debts due to the corporation, as well as all other
things and causes of action belonging to the corporation, sh all
remain vested in the entity to which the corporation has converted
and shall be the property of the entity, and the title to any real
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property vested by deed or otherwise in the corporation shall not
revert or be in any way impaired by reason of the co nversion; but
all rights of creditors and all liens upon any property of the
corporation shall be preserved unimpaired, and all debts,
liabilities and duties of the corporation that has converted shall
remain attached to the entity to which the corporation has
converted, and may be enforced against i t to the same extent as if
said the debts, liabilities and duties had originally been incurred
or contracted by it in its capacity as the entity. The rights,
privileges, powers and interest in property of the corpo ration that
has converted, as well as the deb ts, liabilities and duties of the
corporation, shall not be deemed, as a consequence of the
conversion, to have been transferred to the entity to which the
corporation has converted for any purpose of the laws o f this state.
I. No vote of shareholders of a corporation shall be necessary
to authorize a conversion if no shares of the stock of the
corporation shall have been issued before the adoption by the board
of directors of the resolution approving the conver sion.
J. Nothing in this section shall be de emed to authorize the
conversion of a charitable nonstock corporation into another entity,
if the charitable status of such charitable nonstock corporation
would thereby be lost or impaired.
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SECTION 17. AMENDATORY 18 O.S. 2011, Sec tion 1091, as
amended by Section 26, Chapter 323, O.S.L . 2017 (18 O.S. Supp. 2020,
Section 1091), is amended to read as follows:
Section 1091.
APPRAISAL RIGHTS
A. Any shareholder of a corporation of this state who holds
shares of stock on the date of the making of a demand pursuant to
the provisions of subsec tion D of this section with respect to the
shares, who continuously holds the shares thr ough the effective date
of the merger or consolidation, who has otherwise complied with the
provisions of subsect ion D of this section and who has neither voted
in favor of the merger or consolida tion nor consented thereto in
writing pursuant to the provis ions of Section 1073 of this title
shall be entitled to an appraisal by the district court of the fair
value of the shares of stock under the circumstances described in
subsections B and C of this section. As used in this section, the
word “shareholder” means a holder of record of stock in a stock
corporation; the words “stock” and “share” mean and include what is
ordinarily meant by those words; and “depository receipt” means an
instrument issued by a depository representing an interest in one or
more shares, or fractions thereof, solely of stock of a corporation,
which stock is deposited with the depository.
B. 1. Except as otherwise provided for in this subsection,
appraisal rights shall be av ailable for the shares of any class or
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series of stock of a constituent corporation in a merger or
consolidation, or of the acquired corporation in a share
acquisition, to be effected pursuant to the provisions of Section
1081 of this title, other than a merger effected pursuant to
subsection G of Section 1081 of this title, or, subject to paragraph
3 of this subsection, subsection H of Section 1081, and the
provisions of Section 1082, 1084, 1085, 1086, 1087, 1090.1 or 1090.2
of this title.
2. a. No appraisal rights under this section shall be
available for the shares of any class or series of
stock which stock, or depository receipts in respect
thereof, at the record date fixed to determine the
shareholders entitled to receive n otice of the
meeting of shareholders to act upon the agreement of
merger or consolidation, or, the case of a merger
pursuant to subsection H of Section 1081 of this
title, as of immediately before the execution of the
agreement of merger, were either:
(1) listed on a national securities exchange; or
(2) held of record by more than two thousand holders.
No appraisal rights shall be availa ble for any shares of stock
of the constituent corporation survivin g a merger if the merger did
not require for its approval the vote of the shareholders of the
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surviving corporation as provided in subsection G of Section 1081 of
this title.
b. in In addition, no appraisal rights shall be available
for any shares of stock , or depository receipts in
respect thereof, of the constituent corporation
surviving a merger if the merger did not require for
its approval the vote of the shareholders of the
surviving corporation as provided for in subsection F
of Section 1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this
subsection, appraisal rights pro vided for in this section shall be
available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation pursuant to the
provisions of Section 1081, 1082, 1084, 1085, 1086, 1087, 1090.1 or
1090.2 of this title to accept for the stock anythi ng except:
a. shares of stock of the corporation surviving or
resulting from the merger or consolidation or
depository receipts thereof, or
b. shares of stock of an y other corporation, or
depository receipts in respect thereof, which shares
of stock or depository receipts at the effective date
of the merger or consolidati on will be either listed
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on a national securities exchange or held of record by
more than two thousand holders, or
c. cash in lieu of fractional shares or fractional
depository receipts des cribed in subparagraphs a and b
of this paragraph, or
d. any combination of the shares of stock, depository
receipts, and cash in lieu of the fractional shares or
depository receipts described in subparagraphs a, b,
and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma
corporation party to a merger effected pursuant to the provisions of
subsection H of Section 1081 or Section 1083 or 1083.1 of this title
is not owned by the parent corporation immediately prior to the
merger, appraisal rights shall be available for the shares of the
subsidiary Oklahoma corporation.
C. Any corporation may provide in its certificate of
incorporation that ap praisal rights under this section shall be
available for the shares of any class or series o f its stock as a
result of an amendment to its certificate of incor poration, any
merger or consolidation in which the corporation is a constituent
corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such
a provision, the procedures of this sec tion, including those set
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forth in subsections D and E of this section, shall apply as nearly
as is practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal
rights are provided under thi s section is to be submitted for
approval at a meeting of shareholders, the corporation, not less
than twenty (20) days prior to the meeting, shall notify each of its
shareholders who was such on the record date for notice of such
meeting, or such members who received notice in accordance with
subsection C of Section 1081 of this title, with respect t o shares
for which appraisal rights are available pursuant to subsection B or
C of this section that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall include in
the notice a copy of this section and, if one of the constituent
corporations is a nonstock corporation, a copy of Section 1004.1 of
this title. Each shareholder electing to demand the appraisal of
the shares of the shareholder shall deliver to the corporation,
before the taking of the vote on t he merger or consolidation, a
written demand for appraisal of the shares of the shareholder. The
demand will be sufficient if it reasonably informs the corpor ation
of the identity of the shareholder and that the shareholder intends
thereby to demand the a ppraisal of the shares of the shareholder. A
proxy or vote against the merger or consolidat ion shall not
constitute such a demand. A shareholder electing to take such
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action must do so by a separate written demand as herein provided.
Within ten (10) days after the effective date of the merger or
consolidation, the surviving or resulting corpor ation shall notify
each shareholder of each constituent corporation who has complied
with the provisions of this subsection and has not voted in favor of
or consented to the merger or consolidation as of the date that the
merger or consolidation has become effective; or
2. If the merger or consolidation is approved pursu ant to the
provisions of Section 1073, subsection H of Section 1081, Section
1083 or Section 1083 .1 of this title, either a constituent
corporation before the effective date of the merger o r consolidation
or the surviving or resulting corporation within te n (10) days
thereafter shall notify each of the holders of any class or series
of stock of the constituent corporation who are entitled to
appraisal rights of the approval of the merger or consolidation and
that appraisal rights are available for any or al l shares of such
class or series of stock of the constituent corporation, and shall
include in the notice a copy of this section and, if one of the
constituent corporations is a nonstock co rporation, a copy of
Section 1004.1 of this title. The notice may, and, if given on or
after the effective date of the merger or consolidation, shall, also
notify the shareholders of the effective date of the merger or
consolidation. Any shareholder enti tled to appraisal rights may,
within twenty (20) days after the dat e of mailing of the notice or,
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in the case of a merger approved pursuant to subsection H of Secti on
1081 of this title, within the later of the consummation of an offer
contemplated by subs ection H of Section 1081 of this title and
twenty (20) days after t he date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of
the holder’s shares. The demand will be sufficient if it reasonably
informs the corporation of the identity of the shareholder and that
the shareholder intends to demand the appraisal of the holder’s
shares. If the notice does not notify shareholders of the effective
date of the merger or consolidation either:
a. each constituent corporation shall send a second
notice before the effective date of the merger or
consolidation notifying each of the holders of any
class or series of stock of the constituent
corporation that are entitled to appraisal rights of
the effective date of t he merger or consolidation, or
b. the surviving or resulting corpor ation shall send a
second notice to all holders on or within ten (10)
days after the effective da te of the merger or
consolidation; provided, however, that if the second
notice is sent more than twenty (20) days following
the mailing of the first notice or , in the case of a
merger approved pursuant to subsection H of Section
1081 of this title, later than the later of the
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consummation of the offer contemplated by subsection H
of Section 1081 of this title and twenty (20) days
following the sending of the fi rst notice, the second
notice need only be sent to each shareholder who is
entitled to appraisal rights and who has demanded
appraisal of the holder’s shares in accordance with
this subsection. An affidavit of the secretary or
assistant secretary or of th e transfer agent of the
corporation that is required to give either notice
that the notice has be en given shall, in the absence
of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the shareholders
entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that
shall be not more than ten (10) days prior to the date
the notice is given; provided, if the notice is g iven
on or after the effective date of the merger or
consolidation, the record date shall be the effective
date. If no record date is fixed and the notice is
given prior to the effective date, the record date
shall be the close of business on the day next
preceding the day on which the notice is given.
E. Within one hundred twenty (120) days after the effective
date of the merger or consolidation, the surviving or resulting
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corporation or any shareholder who has complied with the provisions
of subsections A and D of this section and who is otherwise entitled
to appraisal rights, may file a petition in district court demanding
a determination of the value of the stoc k of all such shareholders.
Notwithstanding the foregoing, at any time within sixty (60) da ys
after the effective date of the merger or consolidation, any
shareholder who has not commenced an appraisal proceeding or joined
that proceeding as a named party shall have the right to withdraw
the demand of the shareholder for appraisal and to accept the terms
offered upon the merger or consolidation. Within one hun dred twenty
(120) days after the effective date of the merger or consolidation,
any shareholder who has complied with the requirements of
subsections A and D of this section, upon written r equest, shall be
entitled to receive from the corporation surviving the merger or
resulting from the consolidation a statement setting forth the
aggregate number of shares not voted in favor of the merger or
consolidation and or, in the case of a merger ap proved pursuant to
subsection H of Section 1081 of this title, the aggregate number of
shares, other than any excluded stock as defined in subparagraph d
of paragraph 6 of subsection H of Section 1081 of this t itle, that
were the subject of, and were not t endered into, and accepted for
purchase or exchange in, the offer r eferred to in paragraph 2 of
subsection H of Section 1081 of this title and, in either case, with
respect to which demands for appraisal have b een received and the
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aggregate number of holde rs of the shares. The written statement
shall be mailed to the shareholder within ten (10) days after the
shareholder’s written request for a statement is received by the
surviving or resulting corporation or within ten (10) days after
expiration of the period for delivery of demands for appraisal
pursuant to the provisions of subsection D of this section,
whichever is later. Notwithstanding subsection A of this se ction, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such person
may, in such person’s own name, file a petition or request f rom the
corporation the statement described in this secti on.
F. Upon the filing of any such petition b y a shareholder,
service of a copy thereof sha ll be made upon the surviving or
resulting corporatio n, which, within twenty (20) days after service,
shall file, in the office of the court clerk of the district c ourt
in which the petition was filed, a duly v erified list containing the
names and addresses of all shareholders who have demanded payment
for their shares and with whom agreements regarding the val ue of
their shares have not been reached by the surviving or resulting
corporation. If the petition sh all be filed by the surviving or
resulting corporation, the petition shall be accompanied by such
duly verified list. The court clerk, if so ordered by the court,
shall give notice of the time and place fixed for the hearing on the
petition by registered or certified mail to the surviving or
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resulting corporation and to the shareholders shown on the li st at
the addresses therein stated. Notice shall also be given by one or
more publications at least one (1) we ek before the day of the
hearing, in a newspap er of general circulation published in the Cit y
of Oklahoma City, Oklahoma, or other publication as the court deems
advisable. The forms of the notices by mail and by publication
shall be approved by the court , and the costs thereof shall be borne
by the surviving or resulting corporation.
G. At the hearing on the petition, the court shall determine
the shareholders who have complied with the provisions of this
section and who have become entitled to appraisal rights. The court
may require the shareholde rs who have demanded an appraisal of their
shares and who hold stock represented by certificates to submit
their certificates of stock to the court clerk for notation thereon
of the pendency of the appraisal pr oceedings; and if any shareholder
fails to comply with this direction, the court may dismiss the
proceedings as to that shareholder. If immediat ely before the
merger or consolidation the shares of t he class or series of stock
of the constituent corporatio n as to which appraisal rights are
available were listed on a national securities exchange, the court
shall dismiss the proceedings as to all hol ders of such shares who
are otherwise entitled to appr aisal rights unless (1) the total
number of shares entitl ed to appraisal exceeds one percent (1%) of
the outstanding shares of the class or series el igible for
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appraisal, (2) the value of the considerat ion provided in the merger
or consolidation for such t otal number of shares exceeds One Million
Dollars ($1,000,000.00), or (3) the merger was approved pursu ant to
Section 1083 or Section 1083.1 of this title.
H. After determining the shareholders entitle d to an appraisal,
the court shall appraise the shares , determining their fair value
exclusive of any element o f value arising from the accomplishment or
expectation of the merger or consolidation, toget her with interest,
if any, to be paid upon the amount determined to be the fair value.
In determining the fair value, the court shall take into account all
relevant factors. In determining the fair rate of in terest, the
court may consider all relevant fa ctors. Unless the court in its
discretion determines otherwise for good cause shown, and except as
provided in this subsection, interest from the effective date of the
merger through the date of payment of the judgment shall be
compounded quarterly and sh all accrue at five percent (5%) over the
Federal Reserve discount rate, including any surcharge, as
established from time to time during the period between the
effective date of the merger and the date of payme nt of judgment.
At any time before the entry of judgment in the proceedings, the
surviving corporation may pay to each shareholder entitled to
appraisal an amount in cash, in which case interest shall accrue
thereafter as provided herein only upon the sum of (1) the
difference, if any, between the am ount so paid and the fair value of
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the shares as determined by the court, and (2) interest theretofore
accrued, unless paid at that time. Upon application by the
surviving or resulting corporation or by any sh areholder entitled to
participate in the appra isal proceeding, the court may, in its
discretion, proceed to trial upon the appraisal prior to the final
determination of the shareholder entitled to an appraisal. Any
shareholder whose name appears on the li st filed by the surviving or
resulting corporation pursuant to the provisions of subsection F of
this section and who has submitted the certificates of s tock of the
shareholder to the court clerk, if required, may participate fully
in all proceedings until it is finally determined that the
shareholder is not entitled to appraisal rights pursuant to the
provisions of this section.
I. The court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or
resulting corporation to the shareholders entitled thereto. Payment
shall be made to each shareholder, in the case of holders of
uncertificated stock immedia tely, and in the case of holders of
shares represented by certificates upon the surrender to the
corporation of the certificates representing the sto ck. The court’s
decree may be enforced as other decr ees in the district court may be
enforced, whether the surviving or resulting corporation be a
corporation of this state or of any other state.
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J. The costs of the proceeding may be determined by the co urt
and taxed upon the parties as the court deems equ itable in the
circumstances. Upon application of a sh areholder, the court may
order all or a portion of the ex penses incurred by any shareholder
in connection with the appraisal proceeding , including, without
limitation, reasonable attorney’s fees and the fees and expenses of
experts, to be charged pro rata against the value of all of the
shares entitled to an app raisal.
K. From and after the effective date of the merger or
consolidation, no shareholder who has demanded appraisal rights as
provided for in subsection D of this section shall be entitled to
vote the stock for any purpose or to receive payment of divi dends or
other distributions on the stock, exc ept dividends or other
distributions payable t o shareholders of record at a date which is
prior to the effective date of the merger or consolidation;
provided, however, that if no petition for an appraisal shal l be
filed within the time provided for in sub section E of this section,
or if the shareholder shall deliver to the surviving or resulting
corporation a written withdrawal of the shareholder’s demand for an
appraisal and an acceptance of the merger or cons olidation, either
within sixty (60) days after the effective date of the merger or
consolidation as provided for in subsection E of this section or
thereafter with the written approval of the corpora tion, then the
right of the shareholder to an appraisal s hall cease; provided
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further, no appraisal pro ceeding in the district court shall be
dismissed as to any shareholder without the approval of the court,
and approval may be conditioned upon terms as t he court deems just;
provided, however, that this provisi on shall not affect the right of
any shareholder who has not commenced an appraisal proceedi ng or
joined that proceeding as a named party to with draw such
shareholder’s demand for appraisal and to ac cept the terms offered
upon the merger or consolidation w ithin sixty (60) days after the
effective date of the merger or consolidation, as set forth in
subsection E of this section.
L. The shares of th e surviving or resulting corporation into
which the shares of any objecting shareholders would have been
converted had they assented to the merger or consoli dation shall
have the status of authorized and unissued shares of the surviving
or resulting corporation.
SECTION 18. AMENDATORY 18 O.S. 2011, Section 2001, as
amended by Section 37, Ch apter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 2001), is amended to read as follows:
Section 2001.
DEFINITIONS
As used in the Oklahoma Limited Liability C ompany Act, unless
the context otherwise requires:
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1. “Articles of organization ” means documents filed for the
purpose of forming a limited liability company, and the articles as
amended;
2. “Bankrupt” means bankrupt under the United States Bankruptcy
Code, as amended, or insolvent under any state insolvency act;
3. “Business” means any trade, occu pation, profession or other
activity regardless of whether engaged in for gain, profit or
livelihood;
4. “Capital contribution” means anything of value that a person
contributes to the limited liability company as a prerequisite for,
or in connection with , membership, including cash, property,
services rendered, or a promissory note or other binding obligation
to contribute cash or property or to perform servic es;
5. “Capital interest” means the fair market value as of the
date contributed of a member ’s capital contribution as adjusted for
any additional capital contributions or wit hdrawals, a person’s
share of the profits and losses of a limited liability comp any and a
person’s right to receive distributions of th e limited liability
company’s assets;
6. “Corporation” means a corporation formed organized under the
laws of this state or a foreign corporation as defined in this
section the laws of any jurisdictio n other than this state;
7. “Court” includes every court and judge having jurisdiction
in the case;
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8. “Foreign corporation” means a corporation formed organized
under the laws of any state jurisdiction other than this state , or
under the laws of the Dis trict of Columbia or any foreign country ;
9. “Foreign limited liability company ” means:
a. an unincorporated association,
b. organized formed under the laws of a state any
jurisdiction other than the laws of this state or
organized under the laws of any f oreign country, and
c. organized formed under a statute pursuant to which an
association may be f ormed that affords to each of its
members limited liability with respect to the
liabilities of the entity, and a limited liability
company formed under the law s of any state other than
this state, or under the laws of the District of
Columbia or any foreig n country;
10. “Foreign limited partnership” means a limited partnership
formed under the laws of any state jurisdiction other than this
state, or under the laws of the District of Columbia or any foreign
country;
11. “Jurisdiction”, when used to refer t o a political entity,
means the United States, a state, a tribal government, a foreign
country or a political subdivision of a foreign country;
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12. “Limited liability company” or “domestic limited liability
company” means an entity formed under the Oklaho ma Limited Liability
Company Act and existing under the laws of this state;
12. 13. “Limited partnership” means a limited partnership
formed under the laws of this state or a foreign limited partnership
as defined in this section;
13. 14. “Manager” or “managers” means a person or persons
designated by the members of a limited liability company to manage
the limited liability company as provided in the articles of
organization or an operating agreement;
14. 15. “Member” means a person with an ownership in terest in a
limited liability company, with the rights and obligations specified
under this act the Oklahoma Limited Liability Company Act ;
15. 16. “Membership interest” or “interest” means a member’s
rights in the limited liability company, collectively , including the
member’s share of the profits and losses of the limited liability
company, the right to receive distributions of the limited liability
company’s assets and capital interest, any ri ght to vote or
participate in management , and such other rights accorded to members
under the articles of organization, operating agreement , or the
Oklahoma Limited Liability Company Act;
16. 17. “Operating agreement”, regardless of whether referred
to as an operating agreement and whether oral, in a record, implie d,
or in any combination thereof, means any agreement of the members,
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including a sole membe r, as to the affairs of a limited liability
company and the conduct of its business, including the agreemen t as
amended or restated;
17. 18. “Person” means an individual, a general partnership, a
limited partnership, a limited liability company, a trust, an
estate, an association, a corporation or any ot her legal or
commercial entity;
18. 19. “State” means a state, territory or possession of the
United States, the District of Columbia, or the Commonwealth of
Puerto Rico; and
19. 20. “Charitable entity” means any nonprofit limited
liability company or other entity that i s exempt from taxation under
Section 501(c)(3) of th e United States Internal Revenue Code (26
U.S.C., Section 501(c)(3)), or any successo r provisions.
SECTION 19. AMENDATORY 18 O.S. 2011, Section 2010, is
amended to read as follows :
Section 2010. A. Every domestic limited liability c ompany
shall continuously maintain in this state:
1. A registered office which may be, but need not be, the same
as its principal place of business; and
2. A registered agent for service of process on the limited
liability company that may be the domesti c limited liability company
itself, an individual resident of this state, or a domestic or
qualified foreign corporation, limi ted liability company, or general
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or limited partnership including a limited liability partnership or
a limited liability limited partnership. Each registered agent
shall maintain a business office identical with the registered
office which is open during regular business hours to accept service
of process and otherwise perform the functions of a registered
agent.
B. 1. A limited liability company may designate or change its
registered agent, registered office, or principal office by filing
with the Office of the Secretary of State a statement authorizin g
the designation or ch ange and signed by any manager.
2. A limited liability company may change the street address of
its registered office by filing with the Office of the Secretary of
State a statement of the change signed by any manager.
3. A designation or change of a pri ncipal office or registered
agent or street address of the registered office for a limited
liability company under this subsection is effective when the Office
of the Secretary of State files the statement, unless a later
effective date or time, which shal l be a specified date or time not
later than a time on the ninetieth day after the filing, is provided
in the statement.
C. 1. A registered agent who changes his or her street address
in the state may notify the Office of the Secre tary of State of the
change by filing with the Office of the Secretary of Stat e a
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statement of the change signed by the agent or on the agent’s
behalf.
2. The statement shall include:
a. the name of the limited liability company for which
the change is effective,
b. the new street address of the registered agent, and
c. the date on which the change is effective, if to be
effective after the filing date.
3. If the new address of the registered agent is the same as
the new address of the principal office of the limited liability
company, the statement may include a change of address of the
principal office if:
a. the registered agent notifies the limited liability
company of the change in writing, and
b. the statement recites that the registered agent has
done so.
4. The change of address of the registered agent or principal
office is effective when the Office of the Secretary of State files
the statement, unless a later effective date or time, which shall be
a specified date or time not later than a time on the ninetieth day
after the filing, is provided in the statement.
D. 1. A registered agent may resign by filing with the Office
of the Secretary of State a copy of the resignation, signed and
acknowledged by the registered agent, which contains a statem ent
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that notice of the resignation was given to the limited liability
company at least thirty (30) days before the filing of the
resignation by mailing or delivering the notice to the limited
liability company at its address last known to the registered ag ent
and specifying the address therein.
2. The resignation is effective thirt y (30) days after it is
filed, unless a later effective date or time, which shall be a
specified date or time not later than a time on the ninetieth day
after the filing, is prov ided in the resignation .
3. If a domestic limited liability company fails to obtain and
designate a new registered agent before the resignation is
effective, the Secretary of State shall be deemed to be the
registered agent of the limited liability compan y until a new
registered agent is designated.
E. If a limited liability compa ny has no registered agent or
the registered agent cannot be found, then service of process on the
limited liability company may be made by serving the Secretary of
State as its agent as provided in Se ction 2004 of Title 12 of the
Oklahoma Statutes.
SECTION 20. AMENDATORY 18 O.S. 2011, Section 2016, is
amended to read as follows:
Section 2016.
MANAGERS – DUTIES – GOOD FAITH – LIABILITY
Subject to the provisions of Section 2017 o f this title:
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1. A manager shall discharge the duties as a manager in good
faith, with the care a n ordinary prudent person in a like position
could exercise under similar circumstances, and in the manner the
manager reasonably believes to be in the best i nterests of the
limited liability company;
2. In discharging the duties, a manager may rely on
information, opinions, reports or statements, including financial
statements and other financial data, if prepared or presented by:
a. one or more employees of the limited liability company
whom the manager reasona bly believes to be reliable
and competent in the matters presented,
b. legal counsel, public accountants, or other persons as
to matters the manager reasonably believes are within
the person’s professional or expert competence, or
c. a committee of manager s of which the manager is not a
member if the manager reasonably believes the
committee merits confidence;
A manager is not acting in good faith if the manager has
knowledge concerning the matter in que stion that makes reliance
otherwise permitted by this paragraph unwarranted;
3. Unless otherwise provided in the operating agreement, a
manager has the power and authority to delegate to one or more other
persons any or all of the manager’s rights and, powers and duties to
manage and control th e business and affairs of the limited liability
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company, including to delegate. Any delegation may be to the
agents, officers and employees of a manager to of the limited
liability company, and to delegate by a management agreement or
another agreement with, or otherwis e to, other persons. A
delegation may be irrevocable if it states that it is irrevocable.
The delegation by a manager shall not cause the manager to cease to
be a manager of the limited liability company or cause the delegate
to be a manager of the limit ed liability company. No other
provision of the Oklahoma Limited Liability Company Act shall be
construed to restrict a manager’s power and authority to delegate
any or all of the manager ’s rights, powers and duties to manage and
control the business and affairs of the limited liability company;
4. A manager is not liable for any action taken as a manager,
or any failure to tak e any action, if the manager performed the
duties of the office in compliance with the business judgment rule
as applied to direct ors and officers of a corporation; and
5. Except as otherwise provided in the articles of organization
or operating agreement , every manager must account to the limited
liability company and hold as trustee for it any profit or benefit
derived by the manager without the informed consent of the members
from any transaction connected with the conduct or winding up of the
limited liability company or from any personal use by th e manager of
its property.
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SECTION 21. AMENDATORY 18 O.S. 2011, Section 2054.1, as
amended by Section 52, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 2054.1), is amended to r ead as follows:
Section 2054.1.
CONVERSION OF AN ENTITY TO A LIMITED LIABIL ITY COMPANY
A. As used in this section, th e term “ entity” means a foreign
limited liability comp any, a domestic or foreign public benefit
limited liability company, a domestic or foreign corporation, a
domestic or foreign partnership wh ether general or limited, and
including a limited liability p artnership and a limited liability
limited partnership, and any domestic or foreign unincorporated
nonprofit or for-profit association, trust or enterprise having
members or having outstanding shares of stock or o ther evidences of
financial, beneficial or membership i nterest therein, whether formed
by agreement or under statutory authority or otherwise.
B. Any entity may convert to a domestic limited liability
company by complying with subsection H of this section and filing
with the Secretary of State in accordance w ith Section 2007 of this
title articles of conversion to a limited liability company that
have been executed in accordance with Section 2006 of this title, to
which shall be attached articles of organi zation that comply with
Sections 2005 and 2008 of this title and have been executed by one
or more authorized persons in accordance with Section 2006 of this
title.
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C. The articles of conversion to a limited liability company
shall state:
1. The date on which the entity was first formed;
2. The name, jurisd iction of formation of the entity, and type
of entity when formed and, if changed, its name, jurisdiction, and
type of entity immediately before filing of the articles of
conversion to limited liabilit y company;
3. The name of the limited liability compan y as set forth in
its articles of organizat ion filed in accordance with subsection B
of this section; and
4. The future effective date or time of the conversion to a
limited liability company, which s hall be a date or time certain not
later than ninety (9 0) days after the filing, if it is not to b e
effective upon the filing of the articles of conversion to a limited
liability company and the articles of organization.
D. Upon the effective date or time of the articles of
conversion to limited liability com pany and the articles of
organization, the entity shall be converted to a domestic limited
liability company and the limited liability company shall thereafter
be subject to all of the provisions of the Oklahoma Limited
Liability Company Act, except that n otwithstanding Section 2004 of
this title, the existence of the limited liability company shall be
deemed to have commenced on the date the entity was formed.
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E. The conversion of any entity into a domestic limited
liability company shall not be deemed to affect any obligations or
liabilities of the entity incurred before its conversion to a
domestic limited liability company or the personal liability of any
person incurred before the conversion.
F. When an entity has converted to a domestic limited liabi lity
company under this section, the domest ic limited liability company
shall be deemed to be the same entity as the converting entity. All
of the rights, privileges and powers of the entity that has
converted, and all property, real, personal and mixed, and all debts
due to the entity, as well as all other things and causes of action
belonging to the entity, shall remain vested in the domestic limited
liability company and shall be the property of the domestic limited
liability company, and the title to a ny real property vested by deed
or otherwise in the entity shall not revert or be in any way
impaired by reason of the conversion, but all rights of creditors
and all liens upon any property of the entity shall be preserved
unimpaired, and all debts, liabi lities and duties of the entity that
has converted shall remain attached to the domestic limited
liability company and may be enforced against it to the same extent
as if the debts, liabilities and dut ies had been incurred or
contracted by it in its capaci ty as a domestic limited liability
company. The rights, privileges, powers and interests in property
of the entity, as well as the debts, liabilities and duties of the
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entity, shall not be deemed, as a consequence of the conversion, to
have been transferred to the domestic limited liability compan y to
which the entity has converted for any purpose of the laws of this
state.
G. Unless otherwise agreed or otherwise provided by any laws of
this state applicable to the converting entity, the converting
entity shall not be required to wind up its affai rs or pay its
liabilities and distribute its assets, and the conversion shall not
be deemed to constitute a dissolution of the entity and shall
constitute a continuation of the existence of the converting entity
in the form of a domestic limited liability company.
H. Before filing the articles of conversion to a domestic
limited liability company with the Office of the Secretary of State,
the conversion shall be approved in the manner provided for by the
document, instrument, agreement or other writing, as the case may
be, governing the internal affairs of the entity and the conduct of
its business or by applicable law, as appropriate, and articles of
organization shall be approved by the same authorization required to
approve the conversion.
I. In a conversion of an entity to a domestic limited liability
company under this section, rights or securities of or memberships
or membership, economic or ownership int erests in the entity that is
to be converted to a domestic limited liability company may be
exchanged for or converted into cash, property , or rights or
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securities of or interests in the domestic limited liability company
or, in addition to or in lieu ther eof, may be exchanged for or
converted into cash, property or rights or securities of or
memberships or membership, economic or ownership interests in
another domestic limited liability company or other entity.
J. The provisions of this section shall not be construed to
limit the accomplishment of a change in the law governing, or the
domicile of, an entity to this state by any other means provided for
in an operating agreement or other agreement or as otherwise
permitted by law, including by the amendment of an operating
agreement or other agreement.
K. Nothing in this section shall be deemed to auth orize the
conversion of a charitable ent ity into a domestic limited liability
company, if the charitable status of such entity would thereby be
lost or impaired.
SECTION 22. AMENDATORY 18 O.S. 2011, Section 2054.2, as
amended by Section 53, Chapter 323, O.S.L. 2017 (18 O.S. Supp. 2020,
Section 2054.2), is amended to read as follows:
Section 2054.2.
CONVERSION OF A LIMITED LIABILITY COMP ANY TO AN ENTITY
A. A domestic limited liability com pany may convert to an
entity upon the authorization of such conversion in accordance with
this section. As used in this sectio n, the term “ entity” means a
foreign limited liability company, a domestic or foreign public
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benefit limited liability company, a domestic or foreign
corporation, a domestic or foreign partnership whether general or
limited, and including a limited liabil ity partnership and a limited
liability limited pa rtnership, and any domestic or foreign
unincorporated nonprofit or for -profit association, trust or
enterprise having me mbers or having outstanding shares of stock or
other evidences of financial, beneficial or membership interest
therein, whether formed by agreement or under statutory authority or
otherwise.
B. If the operating agre ement specifies the manner of
authorizing a conversion of the limited liability company, the
conversion shall be authorized as specified in the operating
agreement.
C. If the operating agreement does not specify the manner of
authorizing a conversion of t he limited liability company and does
not prohibit a conversion of the limited liability company, the
conversion shall be authorized in the same manner as is specified in
the operating agreement f or authorizing a merger or consolidation
that involves the limited liability company as a constituen t party
to a merger or consolidation.
D. If the operating agreement does not specify the manner of
authorizing a conversion of the limited liability compan y or a
merger or consolidation that involves the limited lia bility company
as a constituent party an d does not prohibit a conversion of the
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limited liability company, the conversion shall be authorized by the
approval of a majority of the membership intere st or, if there is
more than one class or group of members, then by a majority of the
membership interest in each class or group of members.
Notwithstanding the foregoing, in addition to any other
authorization required by this section, if the entity into which the
limited liability company is to convert does not afford all of its
interest holders prote ction against personal liability for the debts
of the entity, the conversion must be authorized by any and all
members who would be exposed to personal liab ility.
E. Unless otherwise agreed, the conversion of a dome stic
limited liability company to anothe r entity pursuant to this section
shall not require the limited liability company to wind up its
affairs or pay its liabilities and distribute its assets, a nd the
conversion shall not constitute a dissolution of the limited
liability company.
F. In a conversion of a domestic limited liability company t o
an entity under this section, rights or securities of or interests
in the domestic limited liability compa ny which are to be converted
may be exchanged for or convert ed into cash, property, rights or
securities of or memberships or membership, economic o r ownership
interests in the entity to which the domestic limited liability
company is being converted or, i n addition to or in lieu thereof,
may be exchanged for or co nverted into cash, property, rights or
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securities of or memberships or membership, econo mic or ownership
interests in another entity or may be canceled.
G. If the governing act of the a domestic entity to which the
limited liability company is converting does not provide for the
filing of a conversion notice with the Secretary of State or th e
limited liability company is converting to a foreign entity,
articles of conversion executed in accordance w ith Section 2006 of
this title, shall be filed in the Offi ce of the Secretary of State
in accordance with Section 2007 of this title. The article s of
conversion shall state:
1. The name of the limited liability company and, if it has
been changed, the na me under which its articles of organization were
originally filed;
2. The date of filing of its ori ginal articles of organization
with the Secretary of State;
3. The name and type of entity to which the limited liability
company is converting and its jur isdiction of formation, if a
foreign entity;
4. The future effective date or time of the conversion , which
shall be a date or time certain not la ter than ninety (90) days
after the filing, if it is not to be effective upon the filing of
the articles of conversion;
5. That the conversion has been approved in acc ordance with
this section;
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6. The agreement of the foreign entity that it may be served
with process in this state in any action, suit or proceeding for
enforcement of any obligation of the foreign entity arising while it
was a domestic limited liability company, and that it irrevocably
appoints the Secretary of State as its agent to accept service of
process in any such action, suit or proceeding, and its street
address to which a copy of the proce ss shall be mailed to it by the
Secretary of State; and
7. If the domestic entity to which the dome stic limited
liability company is converting w as required to make a filing with
the Secretary of State as a condition of its formation, the type and
date of such filing.
H. Upon the filing of a conversion notice w ith the Secretary of
State, whether under subsection G of this section or under the
governing act of the domestic entity to which the limited liability
company is converting, the filing of any forma tion document required
by the governing act of the domesti c entity to which the limited
liability company is converting, and payment to the Secret ary of
State of all prescribed fees, the Secretary of State shall certify
that the limited liability company h as filed all documents and paid
all required fees, and the reupon the domestic limited liability
company shall cease to exist as a limited liabilit y company of this
state. The Secretary of State’s certificate shall be prima facie
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evidence of the conversion by the domestic limited liability
company.
I. The conversion of a domestic limited liability company to an
entity under this section and the resulting cessation of its
existence as a domestic limited liability company shall not be
deemed to affect any obligations or liabilities of the limited
liability company incurred before the conversio n or the personal
liability of any person incurred before the conversion, nor shall it
be deemed to affect the choice of law applicable to the limited
liability company with respect to matters arising before the
conversion.
J. When a domestic limited liability com pany has converted to
an entity under this section, the entity shall be deemed to be the
same entity as the limited liability company. All of the righ ts,
privileges and powers of the domestic limited liability company that
has converted, and all property, real , personal and mixed, and all
debts due to the limited liability company, as well a s all other
things and causes of action belonging to the limited liabili ty
company, shall remain vested in the entity to which the domestic
limited liability company has con verted and shall be the property of
the entity, and the title to any real property vested by deed or
otherwise in the domestic limited liability company shall not revert
or be in any way impaired by reason of the conversion; but all
rights of creditors and all liens upon any property of the limited
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liability company shall be preserved un impaired, and all debts,
liabilities and duties of the limited liability company that has
converted shall remain attached to the entity to which the domestic
limited liability company has converted, and may be enforced against
it to the same extent as if said the debts, liabilities and duties
had originally been incurred or contracted by it in its capacity as
the entity. The rights, privileges, powers and interests in
property of the domestic limited liability company that has
converted, as well as the deb ts, liabilities and duties of the
limited liability com pany, shall not be deemed, as a consequence of
the conversion, to have been transferred to the entity to which the
limited liability company has converted for any purpose of the laws
of this state.
K. Nothing in this section shall be deemed to authorize t he
conversion of a charitable domestic limited liabilit y company into
another entity, if the charitabl e status of such domestic limited
liability company would th ereby be lost or impaired.
SECTION 23. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2061 of Title 18, unless there
is created a duplication in numbering, reads as follows:
PUBLIC BENEFIT LIMITED LIAB ILITY COMPANIES.
A. Sections 23 through 29 of this act shall be known and may be
cited as the “Oklahoma Public Benefit Limited Liability Company Ac t”
and within such sections as this act.
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B. A “public benefit limited liability company” is a for-profit
limited liability company formed under a nd subject to the
requirements of the Oklahoma Limited Liabi lity Company Act including
a professional limited liability company, that is intended to
produce a public benefit or public benefits and to operate in a
responsible and sustainable manner as prov ided under this act. A
public benefit limited liability com pany is formed by filing
articles of organization as required under the Oklahoma Limited
Liability Company Act and further by stating in the heading of its
articles of organization that it is a pu blic benefit limited
liability company and by setting forth one or more public benefits
to be promoted by the limited liability company in its articles of
organization. The operating agreement of a public benefit limi ted
liability company may not contain any provision inconsistent with
this act.
C. “Public benefit” means a positive effect, or reduction of
negative effects, on one or more categories of persons, entities,
communities or interests, other than members in their capacities as
members including effects of an artistic, charitable, cultural,
economic, educational, environmental, literary, medical, religi ous,
scientific or technological nature. “Public benefit provisi ons”
means the provisions of the articles o f organization or an operating
agreement contemplated by this act.
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SECTION 24. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2062 of Title 18, unless there
is created a duplication in numbering, reads as follows:
CERTAIN AMENDMENTS AND M ERGERS; VOTES REQUIRED.
A. Upon the approval of members or other holders who own at
least two-thirds (2/3) of the then outstanding equity interests
entitled to vote:
1. An existing domestic limited liability company including a
professional limited liab ility company, may become a public benefit
limited liability company by amending its articles of organization
to conform to the pu blic benefit provisions of subsection B of
Section 20 of this act; or
2. A domestic entity that is not a public benefit limit ed
liability company may become a public benefit limited lia bility
company through a merger, consolidation, exchange or conversion in
which the surviving or resulting entity is a public benefit limited
liability company whose articles of organization confo rm to the
public benefit provisions of subsection B of Section 23 of this act.
B. “Domestic entity” is a limited liability compan y,
corporation, partnership whether general or limited, and including a
limited liability partnership and a limited liability limited
partnership, an entity subject to the Professional E ntity Act, or
any unincorporated nonprofit or for-profit association, trust or
enterprise having members or having o utstanding shares of stock or
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other evidences of financial, beneficial or member ship interest
therein, whether formed by agreement or under statutory authority or
otherwise, formed under the laws of this jurisdiction.
C. A public benefit limited liability company may not, without
the approval of members who own at least two-thirds (2/3) of the
then outstanding membership interests of the limited liability
company entitled to vote:
1. Amend its articles of orga nization to delete, add or amend a
provision required by subsection B of Section 23 of this act;
2. Merge or consolidate with or exchange or convert into
another entity if, as a result of such merger, consolidation,
exchange or conversion, the membership interests in such limited
liability company wo uld become, or be converted into or exchan ged
for the right to receive, membersh ip interests or other equity
interests in a domestic or foreign limited liability company or
other entity that is not a public benefit limited liability company
or similar entity, the articles of organization or operat ing
agreement, or similar governing do cument, of which does not contain
provisions identifying a public benefit or public benefits
comparable in all material respects to those set forth in the
articles of organizat ion of such limited liability company as
contemplated by subsection B of Section 23 of this act; or
3. Cease to be a public benefit limited liability company under
the provisions of this act.
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SECTION 25. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2063 of Title 18, unless there
is created a duplication in numbering, reads as follows:
DUTIES OF MEMBERS OR MANAGERS.
A. The members or managers or other pe rsons with authority to
manage or direct the b usiness and affairs of a public benefit
limited liability company shall manage o r direct the business and
affairs of the public benefit limi ted liability company in a manner
that balances the pecuniary interest s of the members, the best
interests of those materially affected by the limited liability
company’s conduct, and the specific public benefit or public
benefits set forth in its articles of organization. Unless
otherwise provided in an operating agreement, no member, manager or
other person with auth ority to manage or direct the business and
affairs of the public benefit limited liability company shall have
any liability for monetary dam ages for the failure to manage or
direct the business and affairs of t he public benefit limited
liability company as provided in this subsection.
B. A member or manager of a public benefit limite d liability
company or any other person with authority to ma nage or direct the
business and affairs of the public benefit limited liability company
shall not, by virtue of the public benefit provisions or subsection
B of Section 23 of this act, have any duty to any person on account
of any interest of such person i n the public benefit or public
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benefits set forth in its articles of o rganization or operating
agreement or on accou nt of any interest materially affected by the
limited liability company’s conduct and, with respect to a decision
implicating the balance re quirement in subsection A of this section,
will be deemed to satisfy such person’s fiduciary duties to members
and the limited liability company if such person’s decision is both
informed and disinterested and not such that no person of ordinary,
sound judgment would approve.
SECTION 26. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2064 of Title 18, unless there
is created a duplication in numbering, reads as follows:
PERIODIC STATEMENTS AND THIRD -PARTY CERTIFICATION.
A public benefit limited liability company shall no less than
biennially provide its members with a statement as to the limited
liability company’s promotion of the public benef it or public
benefits set forth in its articles of organizat ion and as to the
best interests of those materially affected by the limited liability
company’s conduct. The statement shall include:
1. The objectives tha t have been established to promote suc h
public benefit or public benefits and interests;
2. The standards that have been adopted to measure the limited
liability company’s progress in promoting such public benefit or
public benefits and interests;
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3. Objective factual information based on th ose standards
regarding the limited liability company ’s success in meeting the
objectives for promoting such public benefit or public benefits and
interests; and
4. An assessment of the limited liability company’s success in
meeting the objectives and pro moting such public benefit or public
benefits and interests.
SECTION 27. NEW LAW A new section of law to be codified
in the Oklahoma Statu tes as Section 2065 of Title 18, unless there
is created a duplication in numbering, reads as follows:
DERIVATIVE SUITS.
Members of a public benefit limite d liability company or
assignees of membership interests in a public b enefit limited
liability company owning indivi dually or collectively, as of the
date of instituting such derivative suit, at l east two percent (2%)
of the then-current membership interests of the limited liability
company may maintain a derivative lawsuit to enforce the
requirements set forth in subsection A of Section 25 of this act.
SECTION 28. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2066 of Title 18, unless there
is created a duplication in n umbering, reads as follows:
NO EFFECT ON OTHER LIMITED LIABILITY COMPANIES.
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This act shall not affect a statute or rule of law that is
applicable to a limited liability company that is n ot a public
benefit limited liability company.
SECTION 29. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sect ion 2067 of Title 18, unless there
is created a duplication in numbering, reads as follows:
ACCOMPLISHMENT BY OTHER MEANS.
The provisions of this act shall not be const rued to limit the
accomplishment by any other means permitted by law of the formation
or operation of a limited liability comp any that is formed or
operated for a public benefi t including a limited liability company
that is designated as a public benefit limited liability company,
that is not a public benefit limited liability company.
SECTION 30. AMENDATORY 54 O.S. 2011, Section 500-114A,
is amended to read as f ollows:
Section 500-114A.
OFFICE AND AGENT FOR SERVICE OF PROCESS.
(a) A limited partnership shall designate and continuously
maintain in this state:
(1) an office, which need not be a place of its activity in
this state; and
(2) an agent for servi ce of process.
(b) A foreign limited partnership shall designate and
continuously maintain in this state an agent for service of process.
SENATE FLOOR VERSION - SB228 SFLR Page 154
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(c) An agent for ser vice of process of a limited partnership or
foreign limited partnership must be an individual wh o is a resident
of this state or a corporation, limited liability company, or
general or limited partnership including a limited liability
partnership or a limited liability limited partnership, formed in or
authorized to do business in this state. A domesti c limited
partnership may be its own agent.
SECTION 31. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON JUDICIARY
February 9, 2021 - DO PASS