The Vermont Statutes Online

Title 11B: Nonprofit Corporations

Chapter 007: Members, Meetings and Voting

• Subchapter 001: MEETINGS AND ACTIONS WITHOUT MEETINGS

• § 7.01. Annual meeting and regular meetings

  (a) A corporation with members shall hold an annual membership meeting at a time stated in or fixed in accordance with the bylaws, unless a different time is specifically set forth in the notice of meeting with the change in time being duly noted.

  (b) A corporation with members may hold regular membership meetings at the times stated in or fixed in accordance with the bylaws, unless a different time is specifically set forth in the notice of meeting with the change in time being duly noted.

  (c) Annual and regular membership meetings shall be held in this State unless permitted in the bylaws of the corporation to be held outside this State. Annual meetings shall be held at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, or otherwise stated in the notice of meeting, annual meetings shall be held at the corporation’s principal office.

  (d) At the annual meeting:

  (1) the president and chief financial officer shall report on the activities and financial condition of the corporation; and

  (2) the members shall consider and act upon such other matters as may be raised consistent with the notice requirements of section 7.05 and subsection 7.23(b) of this chapter.

  (e) At regular meetings, the members shall consider and act upon such matters as may be raised consistent with the notice requirements of section 7.05 and subsection 7.23(b) of this title.

  (f) An annual or regular meeting may be conducted by means of any electronic or telecommunications mechanism, including video-conferencing telecommunication.

  (g) The failure to hold an annual meeting at a time stated in or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporation action. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 33, eff. April 15, 2010.)

• § 7.02. Special meeting

  (a) A corporation with members shall hold a special meeting of members:

  (1) on call of its board or the person or persons authorized to do so by the articles or bylaws; or

  (2) if the holders of at least five percent of the voting power sign, date, and deliver to any corporate officer one or more written demands for the meeting describing the purpose or purposes for which it is to be held.

  (b) The close of business on the 30th day before delivery of the demand or demands for a special meeting to any corporate officer is the record date for the purpose of determining whether the five percent requirement of subsection (a) of this section has been met.

  (c) If a notice for a special meeting demanded under subsection (a)(2) of this section is not given pursuant to section 7.05 of this title within 30 days after the date the written demand or demands are delivered to a corporate officer, regardless of the requirements of subsection (d) of this section, a person signing the demand or demands may set the time and place of the meeting and give notice pursuant to section 7.05 of this title.

  (d) Special meetings of members shall be held in this State, unless permitted in the bylaws of the corporation to be held outside this State. Special meetings shall be held at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation’s principal office.

  (e) Only those matters that are within the purpose or purposes described in the meeting notice required by section 7.05 of this title may be conducted at a special meeting of members.

  (f) A special meeting may be conducted by means of any electronic or telecommunications mechanism, including video-conferencing telecommunication. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 34, eff. April 15, 2010.)

• § 7.03. Court-ordered meeting

  (a) The Superior Court of the county where a corporation’s principal office (or, if none in this State, its registered office) is located may summarily order a meeting to be held:

  (1) on application of any member or other person entitled to participate in the annual meeting, and in the case of a public benefit corporation, the Attorney General, if an annual meeting was not held within the earlier of six months after the end of the corporation’s fiscal year or 15 months after its last annual meeting; or

  (2) on application of a member who signed a demand for a special meeting valid under section 7.02 of this title, a person or persons entitled to call a special meeting, and in the case of a public benefit corporation, the Attorney General, if:

  (A) notice of the special meeting was not given within 30 days after the date the demand was delivered to a corporate officer; or

  (B) the special meeting was not held in accordance with the notice.

  (b) The court may fix the time and place of the meeting, specify a record date for determining members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the votes represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes of the meeting.

  (c) If the court orders a meeting, it may also order the corporation to pay the member’s costs (including reasonable counsel fees) incurred to obtain the order. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.04. Action by written consent

  (a) Unless the articles of incorporation preclude the taking of action required or permitted by this title without a members’ meeting, action required or permitted by this title to be taken at a members’ meeting may be taken without a meeting if the action is taken by all the members entitled to vote on the action. Each action must be evidenced by one or more written consents describing the action taken, signed by all the members entitled to vote on the action, and delivered to the corporation for inclusion in the minutes or filed with the corporate records.

  (b) If the articles of incorporation contain specific authority to do so, action required or permitted by this title to be taken at a members’ meeting may be taken without a meeting if the action is taken by the holders of at least a majority of all of the members entitled to vote on the action, and if each member is given prior notice of the action proposed to be taken. Each action must be evidenced by one or more written consents describing the action taken, signed by at least a majority of all the members entitled to vote and delivered to the corporation for inclusion in the minutes or filed with the corporate records. Prompt notice of any action taken by less than unanimous written consent in lieu of a meeting shall be given to all shareholders entitled to vote on such action under this title.

  (c) If not otherwise fixed under section 7.03 or 7.07 of this title, the record date for determining shareholders entitled to take action without a meeting is the date the first member signs the consent under subsection (a) of this section.

  (d) A consent signed under this section has the effect of a meeting vote and may be described as such in any document.

  (e) For purposes of this section, written consent may be evidenced by an electronic communication or an electronic record. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 35.)

• § 7.05. Notice of meeting

  (a) A corporation shall give notice consistent with its bylaws of meetings of members in a fair and reasonable manner.

  (b) Any notice which conforms to the requirements of subsection (c) of this section is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered.

  (c) Notice is fair and reasonable if:

  (1) the corporation notifies its members of the place, date, and time of each annual and special meeting of members no fewer than 10 (or if notice is mailed by other than first class or registered mail, 30) nor more than 60 days before the meeting date;

  (2) notice of an annual meeting includes a description of any matter or matters which must be approved by the members under sections 8.31, 8.56, 10.03, 10.21, 11.04, 12.02, and 14.02 of this title; and

  (3) notice of a special meeting includes a description of the matter or matters for which the meeting is called.

  (d) Unless the bylaws require otherwise, if an annual or special meeting of members is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under section 7.07 of this title, however, notice of the adjourned meeting must be given under this section to the members of record as of the new record date.

  (e) When giving notice of an annual or special meeting of members, a corporation shall give notice of a matter a member intends to raise at the meeting if:

  (1) requested in writing to do so by a person entitled to call a special meeting; and

  (2) the request is received by the secretary or president of the corporation at least ten days before the corporation gives notice of the meeting. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.06. Waiver of notice

  (a) A member may waive any notice required by this title, the articles, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the member entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

  (b) A member’s attendance at a meeting:

  (1) waives objection to lack of notice or defective notice of the meeting, unless the member makes timely objection to holding the meeting or transacting business at the meeting;

  (2) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member makes timely objection to considering the matter when it is presented, or when the member thereafter becomes aware that the matter has been presented.

  (c) The provisions in subsections (a) and (b) of this section shall also be applicable to delegates. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.07. Record date; determining members entitled to notice and vote

  (a) The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to notice of a members’ meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members at the close of business on the business day preceding the day on which notice is given, or if notice is waived, at the close of business on the business day preceding the day on which the meeting is held are entitled to notice of the meeting.

  (b) The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to vote at a members’ meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members on the date of the meeting who are otherwise eligible to vote are entitled to vote at the meeting.

  (c) The bylaws may fix or provide the manner for determining a date as the record date for the purpose of determining the members entitled to exercise any rights in respect of any other lawful action. If the bylaws do not fix or provide for fixing such a record date, the board may fix in advance such a record date. If no such record date is fixed, members at the close of business on the day on which the board adopts the resolution relating thereto, or the 60th day prior to the date of such other action, whichever is later, are entitled to exercise such rights.

  (d) A record date fixed under this section may not be more than 70 days before the meeting or action requiring a determination of members occurs.

  (e) A determination of members entitled to notice of or to vote at a membership meeting is effective for any adjournment of the meeting unless the board fixes a new date for determining the right to notice or the right to vote, which it must do if the meeting is adjourned to a date more than 70 days after the record date for determining members entitled to notice of the original meeting.

  (f) If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date for notice or voting continues in effect or it may fix a new record date for notice or voting. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.08. Action by written ballot

  (a) Unless prohibited or limited by the articles or bylaws, any action which may be taken at any annual or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter; provided, however, that action taken by ballot may not be a substitute for the holding of an annual or special meeting.

  (b) A written ballot shall:

  (1) set forth each proposed action; and

  (2) provide an opportunity to vote for or against each proposed action.

  (c) Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.

  (d) All solicitations for votes by written ballot shall:

  (1) indicate the number of responses needed to meet the quorum requirements;

  (2) state the percentage of approvals necessary to approve each matter other than election of directors; and

  (3) specify the time by which a ballot must be received by the corporation in order to be counted.

  (e) Except as otherwise provided in the articles or bylaws, a written ballot may not be revoked. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• Subchapter 002: VOTING

• § 7.20. Members’ list for meeting

  (a) After fixing a record date for a notice of a meeting, a corporation shall prepare an alphabetical list of the names of all its members who are entitled to notice of the meeting. The list must show the address and number of votes each member is entitled to vote at the meeting. The corporation shall prepare on a current basis through the time of the membership meeting a list of members, if any, who are entitled to vote at the meeting, but not entitled to notice of the meeting. This list shall be prepared on the same basis and be part of the list of members.

  (b) The list of members must be available for inspection by any member for the purpose of communication with other members concerning the meeting, beginning two business days after notice is given of the meeting for which the list was prepared and continuing through the meeting, at the corporation’s principal office or at a reasonable place identified in the meeting notice in the city where the meeting will be held. A member, a member’s agent, or attorney is entitled on written demand to inspect and, subject to the limitations of subsection 16.02(c) and section 16.05 of this title, to copy the list, at a reasonable time and at the member’s expense, during the period it is available for inspection.

  (c) The corporation shall make the list of members available at the meeting, and any member, a member’s agent, or attorney is entitled to inspect the list at any time during the meeting or any adjournment.

  (d) If the corporation refuses to allow a member, a member’s agent, or attorney to inspect the list of members before or at the meeting (or copy the list as permitted by subsection (b) of this section), the Superior Court of the county where a corporation’s principal office (or if none in this State, its registered office) is located, on application of the member, may summarily order the inspection or copying at the corporation’s expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete and may order the corporation to pay the member’s costs (including reasonable counsel fees) incurred to obtain the order.

  (e) Refusal or failure to prepare or make available the members’ list does not affect the validity of action taken at the meeting, unless a member, or his or her agent or attorney objects on the record or in writing to such refusal or failure prior to such action having been taken. In the event of such refusal or failure, and such objection, the action taken at the meeting shall be negated unless:

  (1) the meeting is recessed for a period of not less than five days after the list is made available to the objecting party; or

  (2) the corporation petitions and the Superior Court declares that the corporation’s refusal or failure is in accordance with the law. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.21. Voting entitlement generally

  (a) Unless the articles or bylaws provide otherwise, each member is entitled to one vote on each matter voted on by the members.

  (b) Unless the articles or bylaws provide otherwise, if a membership stands of record in the names of two or more persons, their acts with respect to voting shall have the following effect:

  (1) if only one votes, such act binds all; and

  (2) if more than one votes, the vote shall be divided on a pro rata basis. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.22. Quorum requirements

  (a) Unless this title, the articles, or bylaws provide for a higher or lower quorum, ten percent of the votes entitled to be cast on a matter must be represented at a meeting of members to constitute a quorum on that matter.

  (b) A bylaw amendment to decrease the quorum for any member action may be approved by the members, or, unless prohibited by the bylaws, by the board.

  (c) A bylaws amendment to increase the quorum required for any member action must be approved by the members.

  (d) Unless one-third or more of the voting power is present in person or by proxy, the only matters that may be voted upon at an annual meeting of members are those matters that are described in the meeting notice. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.23. Voting requirements

  (a) Unless this title, the articles, or the bylaws require a greater vote or voting by class, if a quorum is present, action on a matter by members is approved, if the votes cast by the members favoring the action exceeds the votes cast opposing the action.

  (b) A bylaw amendment to increase or decrease the vote required for any member action must be approved by the members. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.24. Proxies

  (a) Unless the articles or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by:

  (1) signing an appointment form either personally or by an attorney-in-fact; or

  (2) by transmitting to the corporation or the corporation’s duly authorized agent an appointment of proxy by electronic transmission, including telephone or e-mail.

  (b) An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for 11 months unless a different period is expressly provided in the appointment form; provided, however, that no proxy shall be valid for more than three years from its date of execution.

  (c) An appointment of a proxy is revocable by the member.

  (d) The death or incapacity of the member appointing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

  (e) Appointment of a proxy is revoked by the person appointing the proxy:

  (1) attending any meeting and voting in person;

  (2) prior to a vote being taken on an action, delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a signed writing or an electronic transmission stating that the appointment of the proxy is revoked or a subsequent appointment form.

  (f) Subject to section 7.27 of this title and any express limitation on the proxy’s authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy’s vote or other action as that of the member making the appointment. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2001, No. 26, § 3.)

• § 7.25. Cumulative voting for directors

  (a) If the articles and bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two or more candidates.

  (b) Cumulative voting is not authorized at a particular meeting unless:

  (1) the meeting notice or statement accompanying the notice states that cumulative voting will take place; or

  (2) a member who has the right to cumulate his or her votes gives notice to the corporation not less than 48 hours before the time set for the meeting of his or her intent to cumulate his or her votes during the meeting, and if one member gives this notice, all other members entitled to vote and participating in the election are entitled to cumulate their votes without giving further notice.

  (c) A director elected by cumulative voting may be removed by the members without cause if the requirements of section 8.08 of this title are met unless the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of directors authorized at the time of the director’s most recent election were then being elected.

  (d) Members may not cumulatively vote if the directors and members are identical. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.26. Other methods of electing directors

  A corporation may provide in its articles or bylaws for election of directors by members or delegates:

  (1) on the basis of chapter or other organizational unit;

  (2) by region or other geographic unit;

  (3) by preferential voting; and

  (4) by any other reasonable method. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 7.27. Corporation’s acceptance of votes

  (a) If the name signed or delivered by electronic transmission on a vote, consent, waiver, or proxy appointment corresponds to the name of a member, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member.

  (b) If the name signed or delivered by electronic transmission on a vote, consent, waiver, or proxy appointment does not correspond to the record name of a member, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if:

  (1) the member is an entity and the name signed or delivered by electronic transmission purports to be that of an officer or agent of the entity;

  (2) the name signed or delivered by electronic transmission purports to be that of an attorney-in-fact of the member and if the corporation requests, evidence acceptable to the corporation of the authority of the attorney-in-fact to represent the member has been presented with respect to the vote, consent, waiver, or proxy appointment;

  (3) two or more persons hold the membership as cotenants or fiduciaries and the name signed or delivered by electronic transmission purports to be the name of at least one of the coholders and the person signing or delivering by electronic transmission appears to be acting on behalf of all the coholders; and

  (4) in the case of a mutual benefit corporation:

  (A) the name signed or delivered by electronic transmission purports to be that of an administrator, executor, guardian, or conservator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;

  (B) the name signed or delivered by electronic transmission purports to be that of a receiver or trustee in bankruptcy of the member, and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.

  (c) The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of:

  (1) the signature on it;

  (2) the signatory’s authority to sign for the member; or

  (3) the electronic transmission by which the proxy appointment was made.

  (d) The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection.

  (e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2001, No. 26, § 4.)

• Subchapter 003: VOTING AGREEMENTS

• § 7.30. Voting agreements

  (a) Two or more members may provide for the manner in which they will vote by signing an agreement for that purpose. Such agreements may be valid for a period of up to 10 years. For public benefit corporations, such agreements must have a reasonable purpose not inconsistent with the corporation’s public or charitable purposes.

  (b) A voting agreement created under this section is specifically enforceable. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)