SH voting

Question 1

outstanding stock

Answer 1

shares corp has issued but not reacquired

Question 2

SH recording and recording date

Answer 2

Record SH (iow: person who is a SH in the corporate record) as of record date can vote at meeting if they are a SH by the meeting date

• Corp sets annual meeting on 7/7
• Sets record date 06/8
• S sells shares 06/25 to B
• Who votes at the 7/7 meeting?
  
  • S because S is the SH on the record on 06/08 not B

Question 3

record date

who fixes?

Answer 3

record date is fixed by BOD but record date cannot be more than 70 days before meeting

iow: date of record date can MAX be 70 days away from a meeting

• record date: 01/01, meeting 03/12 → this is 70 days and so record date is valid
• record date: 01/01, meeting 12/01 → this is 334 day and so record date is invalid

Question 4

exceptions to record owner, record date

Answer 4

1. Treasury stock - corp reacquires before record date so corp owns stock → corp does not vote on stock, no one owns because NOT outstanding on record date
2. Death of SH after record date
   
   1. SH executor can vote
3. Voting by proxy - SH can use proxy to vote

Question 5

voting by proxy

Answer 5

Proxy is:

1. A writing (fax, email are acceptable)
2. Writing is signed by record SH (email fine if send can be identified)
3. Directed to secretary of corp
4. SH proxy authorizes another person to vote the shares

Question 6

how long is a proxy good for

Answer 6

11 months unless otherwise noted

Question 7

revocation of proxy

Answer 7

SH can revoke proxy by

1. Attending meeting
2. In writing to corp secretary

Question 8

Proxy is irrevocable if

Answer 8

Irrevocable proxy → a proxy + an interest -OR- a proxy given as security

Requires that:

1. The proxy says it’s irrevocable and
2. Proxy holder has an interest in shares other than a voting interest (i.e. a valid interest could be one that gives the holder the option to buy the shares)

Question 9

voting trust

Answer 9

written agreement of SH under which all shares owned by parties to agreement are transferred to a trustee who votes the shares and distributes the dividends in accordance with the provisions of the trust agreement

10 yr max but renewable

Question 10

voting trust requirements

Answer 10

1. written trust agreement which details how shares will be voted
2. copy of agreement given to corp
3. legal title to shares transferred to voting trustee and
4. og SH receive certificate and retain all SH rights except for voting

Question 11

voting agreement

Answer 11

SH enter into a voting or pooling agreement to pool votes together

perpetual

Question 12

voting agreement requirements

Answer 12

agreement is written and signed

Question 13

SH meeting types

Answer 13

1. annual meetings - must happen, usually for electing directors for BOD (not officers)
2. special meetings - can be called by
   
   1. BOD
   2. president of corp
   3. holders of a least 10% of outstanding shares (meaning shares that have not been reacquired)
   4. anyone else authorized by AOI/bylaws

Question 14

notice requirement for meetings

Answer 14

1. written
2. notice has to be at least 10 days min before and a MAX of 60 days before meeting
3. notice has date, time, place
   
   1. SH special meetings also include purpose (unlike BOD special meetings which do not need to include purpose)

Question 15

failure to give notice of a meeting

Answer 15

voids what happen at meeting unless

1. express waiver, written and signed OR
2. implied waiver

Question 16

SH vote

Answer 16

1. elect Ds
2. remove Ds
3. make fund’l changes to corp

Question 17

quorum

Answer 17

determines by number of shares** **represented

quorum = majority of outstanding shares unless AOI require more

quorum NOT lost if ppl leave

Question 18

voting in genereal

Answer 18

after quorum met

1. elect director - plurality person who gets most votes
2. fund’l change - majority of shares entitled to vote
3. remove D - majority of shares entitled to vote
4. other matters - majority of shares entitled to vote

• 12,000 outstanding shares, 8,000 present, 6,000 vote on amending bylaws. how many votes needed? at least 3,001*
• 6,000 voting, so 6,000 entitled to vote so need more than half of 6,000 for majority*

Question 19

cumulative voting

Answer 19

only available when SH elects Ds

if AOI silent ab cumulative voting then it doesn’t exist

common in c-corps

Question 20

straight voting

Answer 20

each outstanding share gets one vote

Question 21

cumulative voting

Answer 21

can split up voting power however you like; top two that finish are elected

FORMULA: # of shares × # of directors to be elected

Ex: X has 30, Y has 40. There are 2 BODs to be elected. X has 60 votes to cast, Y has 80 votes to cast. X can put all 60 on herself, Y can but all 80 on himself. They finish top 2 so both elected to BOD