N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 207: Board of directors of a franchised corporation

* § 207. Board of directors of a franchised corporation. 1. a. The

board of directors, to be called the New York racing association

reorganization board, shall consist of seventeen members, five of whom

shall be elected by the present class A directors of The New York Racing

Association, Inc., eight to be appointed by the governor, two to be

appointed by the temporary president of the senate and two to be

appointed by the speaker of the assembly.

(i) The governor shall nominate a member to serve as chair, subject to

confirmation by majority vote of the board of directors. All non-ex

officio members shall have equal voting rights.

(ii) In the event of a member vacancy occurring by death, resignation

or otherwise, the respective appointing officer or officers shall

appoint a successor who shall hold office for the unexpired portion of

the term. A vacancy from the members appointed from the present board of

The New York Racing Association, Inc., shall be filled by the remaining

such members.

* b. The franchised corporation shall establish a compensation

committee to fix salary guidelines, such guidelines to be consistent

with an operation of other first class thoroughbred racing operations in

the United States; a finance committee, to review annual operating and

capital budgets for each of the three racetracks; a nominating

committee, to nominate any new directors to be designated by the

franchised corporation to replace its existing directors; and an

executive committee. Each of the compensation, finance, nominating and

executive committees shall include at least one of the directors

appointed by the governor, and the executive committee shall include at

least one of the directors appointed by the temporary president of the

senate and at least one of the directors appointed by the speaker of the

assembly.

* NB There are 2 par b's

* b. In addition to these voting members, the board shall have two ex

officio members to advise on critical economic and equine health

concerns of the racing industry, one appointed by the New York

Thoroughbred Breeders Inc., and one appointed by the New York

thoroughbred horsemen's association (or such other entity as is

certified and approved pursuant to section two hundred twenty-eight of

this article).

* NB There are 2 par b's

* c. All directors shall serve at the pleasure of their appointing

authority.

* NB There are 2 par c's

* c. Upon the effective date of this paragraph, the structure of the

board of the franchised corporation shall be deemed to be incorporated

within and made part of the certificate of incorporation of the

franchised corporation, and no amendment to such certificate of

incorporation shall be necessary to give effect to any such provision,

and any provision contained within such certificate inconsistent in any

manner shall be superseded by the provisions of this section. Such board

shall, however, make appropriate conforming changes to all governing

documents of the franchised corporation including but not limited to

corporate by-laws. Following such conforming changes, amendments to the

by-laws of the franchised corporation shall only be made by unanimous

vote of the board.

* NB There are 2 par c's

d. The board, which shall become effective upon appointment of a

majority of public members, shall terminate five years from its date of

creation.

2. Members of the board of directors shall serve without compensation

for their services, but publicly appointed members of the board shall be

entitled to reimbursement from the franchised corporation for actual and

necessary expenses incurred in the performance of their official duties.

3. Members of the board of directors, except as otherwise provided by

law, may engage in private employment, or in a profession or business,

however no member shall have any direct or indirect economic interest in

any video lottery gaming facility, excluding incidental benefits based

on purses or awards won in the ordinary conduct of racing operations, or

any direct or indirect interest in any development undertaken at the

racetracks of the state racing franchise.

4. The affirmative vote of a majority of members of the board of

directors shall be necessary for the transaction of any business or the

exercise of any power or function of the franchised corporation. The

franchised corporation may delegate on an annual basis to one or more of

its members, or its officers, agents or employees, such powers and

duties as it may deem proper.

5. Each voting member of the board of directors of the franchised

corporation shall annually make a written disclosure to the board of any

interest held by the director, such director's spouse or unemancipated

child, in any entity undertaking business in the racing or breeding

industry. Such interest disclosure shall be promptly updated, in

writing, in the event of any material change.

The board shall establish parameters for the reporting and disclosure

of such director interests.

* NB Effective until the appointment of a majority of the state

franchise oversight board members

* § 207. Board of directors of a franchised corporation. 1. a. The

board of directors, to be called the New York racing association board,

shall consist of seventeen members who shall have equal voting rights:

two appointed by the governor, two appointed by the temporary president

of the senate and two appointed by the speaker of the assembly; eight

appointed by the executive committee of the New York racing association

reorganization board of directors constituted pursuant to chapter four

hundred fifty-seven of the laws of two thousand twelve, which shall

continue to exist until such time as the appointments required hereunder

are made. The New York racing association will include knowledge of the

marketplace and communities in which the New York racing association

operates as a factor in board selection; one who shall be the president

and chief executive officer of the franchised corporation, ex officio

and without term limitation; one appointed by the New York Thoroughbred

Breeders, Inc.; and one appointed by the New York thoroughbred

horsemen's association representing at least fifty-one percent of the

horsemen using the facilities of the franchised corporation. The New

York racing association board may include additional ex officio,

non-voting members as appointed pursuant to a majority vote of the

board. All public appointed members of the board shall be a resident of

New York state.

(i) The governor shall nominate a member to serve as chair for an

initial term of three years, who shall serve at the pleasure of the

governor, subject to confirmation by majority vote of the board.

Thereafter, the board shall elect its chair, who shall serve at the

pleasure of the board, from among its members.

(ii) The term of voting membership on the New York racing association

board shall be three years. Individual appointees shall be limited to

serving as a voting member the lesser of three terms or nine years.

Notwithstanding the foregoing, the initial term of one member appointed

by each of the governor, temporary president of the senate, and speaker

of the assembly, the member appointed by the New York thoroughbred

horsemen's association, and the member appointed by the New York

Thoroughbred Breeders, Inc. shall expire March thirty-first, two

thousand eighteen; the initial term of the remaining members appointed

by each of the governor, temporary president of the senate, and speaker

of the assembly and two members appointed by the New York racing

association reorganization board shall expire on March thirty-first, two

thousand nineteen; the initial term of three members appointed by the

New York racing association reorganization board shall expire on March

thirty-first, two thousand twenty-one, and the initial term of three

members appointed by the New York racing association reorganization

board shall expire on March thirty-first, two thousand twenty-three. The

eight initial members appointed by the New York racing association

reorganization board shall hold appointment as a voting member for the

greater of three terms or nine years.

(iii) In the event of a member vacancy occurring by death, resignation

or otherwise, the respective appointing authority shall appoint a

successor who shall hold office for the unexpired portion of the term.

In the case of vacancies among members appointed by the executive

committee of the New York racing association reorganization board of

directors constituted pursuant to chapter four hundred fifty-seven of

the laws of two thousand twelve, appointments thereafter shall be made

by the executive committee of the New York racing association board as

constituted by the chapter of the laws of two thousand seventeen that

amended this section.

(iv) Beginning January first, two thousand twenty-six, one member

appointed by the governor, one member appointed by the temporary

president of the senate, one member appointed by the speaker of the

assembly, and four members appointed by the executive committee of the

New York racing association board of directors shall satisfy at least

one of the following requirements at the time of appointment or

reappointment: (1) over the three years prior, owned or trained horses

with a cumulative average of fifteen starts at New York race tracks per

year, (2) be a breeder of record registered with the thoroughbred

breeding and development fund, (3) be a managing partner in a New York

state-based ownership syndicate licensed with the commission, or (4)

have a cogent interest in the racing and breeding industry in the state.

The provisions of this subparagraph shall not impact any members serving

as of January first, two thousand twenty-six.

(v) Beginning January first, two thousand twenty-six, all non-publicly

appointed members must hold a license pursuant to section two hundred

twenty of this article.

b. The franchised corporation shall establish a compensation committee

to fix salary guidelines, such guidelines to be consistent with an

operation of other first class thoroughbred racing operations in the

United States; a finance and audit committee, to review annual operating

and capital budgets for each of the three racetracks; a nominating and

governance committee, to nominate any new directors to be designated by

the franchised corporation to replace its existing directors and be

responsible for all issues affecting the governance of the franchised

corporation; an equine safety committee to review industry best

practices to improve the safety of horse racing of the three racetracks;

a racing committee to address all issues related to racing operations;

and an executive committee. Each of the compensation, finance,

nominating and executive committees shall include at least one public

member from among the directors appointed by the governor.

c. Upon the effective date of this paragraph, the structure of the New

York racing association board shall be deemed to be incorporated within

and made part of the certificate of incorporation of the franchised

corporation, and no amendment to such certificate of incorporation shall

be necessary to give effect to any such provision, and any provision

contained within such certificate inconsistent in any manner shall be

superseded by the provisions of this section. Such board shall, however,

make appropriate conforming changes to all governing documents of the

franchised corporation including but not limited to corporate by-laws.

Following such conforming changes, amendments to the by-laws of the

franchised corporation shall be made only by unanimous vote of the

board.

2. Members of the New York racing association board shall serve

without compensation for their services, but shall be entitled to

reimbursement from the franchised corporation for actual and necessary

expenses incurred in the performance of their duties for the board.

3. Members of the New York racing association board, except as

otherwise provided by law, may engage in private employment, or in a

profession or business, however no member shall have any direct or

indirect economic interest in any video lottery gaming facility,

excluding incidental benefits based on purses or awards won in the

ordinary conduct of racing operations, or any direct or indirect

interest in any development undertaken at the racetracks of the state

racing franchise including real estate development parcels as defined in

the franchise agreement.

4. The affirmative vote of a majority of members of the New York

racing association board shall be necessary for the transaction of any

business or the exercise of any power or function of the franchised

corporation. The franchised corporation may delegate on an annual basis

to one or more of its members, or its officers, agents or employees,

such powers and duties as it may deem proper.

5. Each voting member of the New York racing association board of the

franchised corporation shall annually make a written disclosure to such

board of any interest held by the director, such director's spouse or

unemancipated child, in any entity undertaking business in the racing or

breeding industry. Such interest disclosure shall be promptly updated,

in writing, in the event of any material change.

The New York racing association board shall establish parameters for

the reporting and disclosure of such director interests.

6. Each voting member of the New York racing association board

appointed by the executive committee of the New York racing association

reorganization board of directors shall seek a racetrack management

license issued by the gaming commission, any fees for which shall be

waived by the commission. No voting member of the board required by the

foregoing to seek a racetrack management license may vote on any board

matter until such license is issued.

7. For purposes of section two hundred twelve of this article, the

establishment of The New York Racing Association, Inc. board of

directors under this section shall not constitute the assumption of the

franchise by a successor entity.

8. The franchise corporation shall not have any direct or indirect

ownership, control, influence, or investment, in any franchise oversight

board approved development or such alternative use as may be approved by

the franchise oversight board conducted on the real estate development

parcels as defined in the franchise agreement.

* NB Effective upon the appointment of a majority of the state

franchise oversight board members