N.Y. Business Corporation Law § 620: Agreements as to voting; provision in certificate of incorporation as to control of directors

§ 620. Agreements as to voting; provision in certificate of

incorporation as to control of directors.

(a) An agreement between two or more shareholders, if in writing and

signed by the parties thereto, may provide that in exercising any voting

rights, the shares held by them shall be voted as therein provided, or

as they may agree, or as determined in accordance with a procedure

agreed upon by them.

(b) A provision in the certificate of incorporation otherwise

prohibited by law because it improperly restricts the board in its

management of the business of the corporation, or improperly transfers

to one or more shareholders or to one or more persons or corporations to

be selected by him or them, all or any part of such management otherwise

within the authority of the board under this chapter, shall nevertheless

be valid:

(1) If all the incorporators or holders of record of all outstanding

shares, whether or not having voting power, have authorized such

provision in the certificate of incorporation or an amendment thereof;

and

(2) If, subsequent to the adoption of such provision, shares are

transferred or issued only to persons who had knowledge or notice

thereof or consented in writing to such provision.

(c) A provision authorized by paragraph (b) shall be valid only so

long as no shares of the corporation are listed on a national securities

exchange or regularly quoted in an over-the-counter market by one or

more members of a national or affiliated securities association.

(d) (1) Except as provided in paragraph (e), an amendment to strike

out a provision authorized by paragraph (b) shall be authorized at a

meeting of shareholders by (A) (i) for any corporation in existence on

the effective date of subparagraph (2) of this paragraph, two-thirds of

the votes of the shares entitled to vote thereon and (ii) for any

corporation in existence on the effective date of this clause the

certificate of incorporation of which expressly provides such and for

any corporation incorporated after the effective date of subparagraph

(2) of this paragraph, a majority of the votes of the shares entitled to

vote thereon or (B) in either case, by such greater proportion of votes

of shares as may be required by the certificate of incorporation for

that purpose.

(2) Any corporation may adopt an amendment of the certificate of

incorporation in accordance with the applicable clause or subclause of

subparagraph (1) of this paragraph to provide that any further amendment

of the certificate of incorporation that strikes out a provision

authorized by paragraph (b) of this section shall be authorized at a

meeting of the shareholders by a specified proportion of votes of the

shares, or votes of a particular class or series of shares, entitled to

vote thereon, provided that such proportion may not be less than a

majority.

(e) Alternatively, if a provision authorized by paragraph (b) shall

have ceased to be valid under this section, the board may authorize a

certificate of amendment under section 805 (Certificate of amendment;

contents) striking out such provision. Such certificate shall set forth

the event by reason of which the provision ceased to be valid.

(f) The effect of any such provision authorized by paragraph (b) shall

be to relieve the directors and impose upon the shareholders authorizing

the same or consenting thereto the liability for managerial acts or

omissions that is imposed on directors by this chapter to the extent

that and so long as the discretion or powers of the board in its

management of corporate affairs is controlled by any such provision.

(g) If the certificate of incorporation of any corporation contains a

provision authorized by paragraph (b), the existence of such provision

shall be noted conspicuously on the face or back of every certificate

for shares issued by such corporation.