SECTIONS 7520-7527 - California Statutes

CORPORATIONS CODE

SECTION 7520-7527

7520. (a) As to directors elected by members, there shall be
available to the members reasonable nomination and election
procedures given the nature, size and operations of the corporation.
(b) If a corporation complies with all of the provisions of
Sections 7521, 7522, 7523, and 7524 applicable to a corporation with
the same number of members, the nomination and election procedures of
that corporation, shall be deemed reasonable. However, those
sections do not prescribe the exclusive means of making available to
the members reasonable procedures for nomination and election of
directors. A corporation may make available to the members other
reasonable nomination and election procedures given the nature, size,
and operations of the corporation.
(c) Subject to the provisions of subdivisions (a), (b), and (d) of
Section 7616, the superior court of the proper county shall enforce
the provisions of this section.

7521. A corporation with 500 or more members may provide that,
except for directors who are elected as authorized by Section 7152 or
7153, and except as provided in Section 7522, any person who is
qualified to be elected to the board of directors of the corporation
may be nominated:
(a) By any method authorized by the bylaws, or if no method is set
forth in the bylaws by any method authorized by the board.
(b) By petition delivered to an officer of the corporation, signed
within 11 months preceding the next time directors will be elected,
by members representing the following number of votes:

Number of Votes Eligible
to be Cast for Director
Disregarding any Provision
for Cumulative Voting Number of Votes
Under 5,000............. 2 percent of voting
power
one-twentieth of 1
percent of
5,000 or more........... voting power but not
less than
100.

This subdivision does not apply to a corporation described in
subdivision (c).
(c) In corporations with one million or more members engaged
primarily in the business of retail merchandising of consumer goods,
by petition delivered to an officer of the corporation, signed within
11 months preceding the next time directors will be elected, by such
reasonable number of members as is set forth in the bylaws, or if no
number is set forth in the bylaws, by such reasonable number of
members as is determined by the directors.
(d) If there is a meeting to elect directors, by any member
present at the meeting in person or by proxy if proxies are
permitted.

7522. A corporation with 5,000 or more members may provide that, in
any election of a director or directors by members of the
corporation except for an election authorized by Section 7152 or
7153:
(a) The corporation's articles or bylaws shall set a date for the
close of nominations for the board. The date shall not be less than
50 nor more than 120 days before the day directors are to be elected.
No nominations for the board can be made after the date set for the
close of nominations.
(b) If more people are nominated for the board than can be
elected, the election shall take place by means of a procedure which
allows all nominees a reasonable opportunity to solicit votes and all
members a reasonable opportunity to choose among the nominees.
(c) A nominee shall have a reasonable opportunity to communicate
to the members the nominee's qualifications and the reasons for the
nominee's candidacy.
(d) If after the close of nominations the number of people
nominated for the board is not more than the number of directors to
be elected, the corporation may without further action declare that
those nominated and qualified to be elected have been elected.

7523. Where a corporation with 500 or more members publishes any
material soliciting a vote for any nominee for director in any
publication owned or controlled by the corporation, the corporation
may provide that it shall make available to all other nominees, in
the same issue of the publication, an equal amount of space, with
equal prominence, to be used by the nominee for a purpose reasonably
related to the election.

7524. A corporation with 500 or more members may provide that upon
written request by any nominee for election to the board and the
payment of the reasonable costs of mailing (including postage), the
corporation shall within 10 business days after such request
(provided payment has been made) mail to all members, or such portion
of them as the nominee may reasonably specify, any material, which
the nominee may furnish and which is reasonably related to the
election, unless the corporation within five business days after the
request allows the nominee, at the corporation's option, the rights
set forth in either paragraph (1) or (2) of subdivision (a) of
Section 8330.

7525. (a) This section shall apply to corporations publishing or
mailing materials on behalf of any nominee in connection with
procedures for the nomination and election of directors.
(b) Neither the corporation, nor its agents, officers, directors,
or employees, may be held criminally liable, liable for any
negligence (active or passive) or otherwise liable for damages to any
person on account of any material which is supplied by a nominee for
director and which it mails or publishes in procedures intended to
comply with Section 7520 or pursuant to Section 7523 or 7524 but the
nominee on whose behalf such material was published or mailed shall
be liable and shall indemnify and hold the corporation, its agents,
officers, directors, and employees and each of them harmless from all
demands, costs, including reasonable legal fees and expenses,
claims, damages and causes of action arising out of such material or
any such mailing or publication.
(c) Nothing in this section shall prevent a corporation or any of
its agents, officers, directors, or employees from seeking a court
order providing that the corporation need not mail or publish
material tendered by or on behalf of a nominee under this article on
the ground the material will expose the moving party to liability.

7526. Without authorization of the board, no corporation funds may
be expended to support a nominee for director after there are more
people nominated for director than can be elected.

7527. An action challenging the validity of any election,
appointment or removal of a director or directors must be commenced
within nine months after the election, appointment or removal. If no
such action is commenced, in the absence of fraud, any election,
appointment or removal of a director is conclusively presumed valid
nine months thereafter.