SB 267 — Amend Business Corporations Act.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA MarSESSION 11, 2025 S.B.S 1 SENATE BILL 267 Short Title:

267 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS15116-MV-12 Short Title:

Rules and Operations of the Senate March 12, 2025 A BILL TO BE ENTITLED AN ACT TO AMEND THE NORTH CAROLINA BUSINESS CORPORATIONS ACT, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.

and(vi)anylimitation onthedurationofthecorporation.ontheduration ofthecorporation.

As used herein, in this subdivision, the term "improper personal benefit" does not include a director's reasonable compensation or other reasonable incidental benefit for or on account of his the director's *DRS15116-MV-12**S267-v-1* General Assembly Of North Carolina Session 2025 service as a director, officer, employee, independent contractor, attorney, or consultant of the corporation.

(c) Corporate action taken in good faith in accordance with the emergency bylaws binds the corporation and the fact that the action was taken bybyspecial special procedures may shall not be used to impose liability on a corporate director, officer, employee, or agent.

Page 2 DRS15116-MV-12Senate Bill 267-First Edition General Assembly Of North Carolina Session 2025 (1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent;

(b) DuringDuringan anemergencydefinedin emergency definedin subsection(d), emergency, unlessunlessemergencybylaws emergency bylaws provide otherwise:otherwise, both of the following apply:

(2) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within thesamerankin orderofseniority, as to the extent necessarynecessaryto to achieve a quorum.

(c) Corporate action taken in good faith under this section during an emergency under this section to further the ordinary business affairs of the corporation binds the corporation and thefactthatsaidtheactionistakenbyspecialproceduresthefactthatsaidthe mayshallnotbeusedtoimposeliabilityactionistakenbyspecialproceduresmayshallnotbeusedtoimposeliability on a corporate director, officer, employee, or agent.agent of the corporation.

(b) A provision of the articles of incorporation or bylaws adopted under subsection (a) of this section does not have the effect of conferring jurisdiction on any court or over any person or claim anddoes not applyif noneofthecourtsspecified bybytheprovision theprovision has therequisitepersonal and subject matter jurisdiction.

DRS15116-MV-12Senate Bill 267-First Edition Page 3 General Assembly Of North Carolina Session 2025 (d) For the purposes of this section, "internal corporate claim" means any of the following:

(4) An action asserting a claim governed bybythe the internal affairs doctrine that is not otherwise included in subdivisions (1) through (3) of this subsection." SECTION 3.(b) G.S.

(2) Arrange for disposition of fractional shares bybythe the shareholders;Dispose of the fractional shares and pay the proceeds to the holders of those shares.

Page 4 DRS15116-MV-12Senate Bill 267-First Edition General Assembly Of North Carolina Session 2025 (c) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the board of directors to determine variations for future series) must shall be summarized on the front or back of each certificate.

No shareholder maymaycommence commence a derivative proceeding until:until both of the following have occurred:

DRS15116-MV-12Senate Bill 267-First Edition Page 5 General Assembly Of North Carolina Session 2025 (2) A majority vote of a committee consisting of two or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors, whether or not the independent directors constituted a quorum.

(1) The nomination or election of the director by persons who are defendants any personwhois adefendant in thederivativeproceedingthederivativeproceedingor oragainstagainst whomaction is demanded;demanded.

The preliminarypreliminarydiscoveryshall discovery shall be limited solelysolelyto to matters germane and necessary to support the facts alleged with particularity relating solely to the requirements of subsection (a) of this section.

Page 6 DRS15116-MV-12Senate Bill 267-First Edition General Assembly Of North Carolina Session 2025 On termination of the derivative proceeding, the court may:may do any of the following:

(a) Subject to the other provisions of this section and Article 9 of this Chapter, a parent unincorporated entity owning shares of a domestic subsidiary corporation that carry at least ninety percent (90%) of the voting power of each class and series of the outstanding shares of the subsidiary corporation and that have the power to vote in the election of directors at the time of a merger under this section may merge the subsidiary corporation or corporations into itself, or mergeitself and oneormoresubsidiaryoneormoresubsidiarycorporations corporations into anothersubsidiaryanothersubsidiarycorporation, corporation, without approval of the board of directors or shareholders of the subsidiary corporation or corporations, unless the articles of incorporation for of the subsidiary corporation or corporations require approval of the shareholders of the subsidiary corporation or corporations, if both all of the following requirements are met:

DRS15116-MV-12Senate Bill 267-First Edition Page 7 General Assembly Of North Carolina Session 2025 (3) The parent unincorporated entity approves, in the manner required by laws of the state or country governing the organization and internal affairs of the parent unincorporated entity, a written plan of merger containing all of the provisions required by G.S.

(3) The manner and basis of converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity, or into cash or other propertypropertyin in whole or in part, or of cancelling the interests.

Page 8 DRS15116-MV-12Senate Bill 267-First Edition