Shareholder

Question 1

Cumulative Voting

Answer 1

Allows minority shareholders to elect directors when multiple seats are up for grabs.

Question 2

Cumulative Voting Formula

Answer 2

No. of Voting Shares
—————————— + 1 = Min. no. shares needed
(No. of Directors + 1)

Question 3

Pooling agreements must be:

Answer 3

1. Limited to subject matters shareholders can vote on

2. Enforced by specific performance or Implied Irrevocable Cross-Proxy

Question 4

Implied Irrevocable Cross-Proxy

Answer 4

A remedy for violating a pooling agreement whereby the non-breaching shareholder gets to vote all the breaching party’s shares

Question 5

If Shareholders of Close Corporation are deadlocked:

Answer 5

1. Counseling
2. Arbitration
3. Provisional Director
4. Voluntary Dissolution
5. Involuntary Dissolution

Question 6

Types of Directors

Answer 6

Inside (full time corp. employees)

Outside (work elsewhere)

Question 7

Minimum Shareholder voting rights:

Answer 7

1. Directors
2. Amend Articles
3. Adopt, Amend, Repeal By-Laws
4. Dissolution of company
5. Sale of all or substantially all assets
6. Approve a statutory merger

Question 8

Shareholder proposals are void if:

Answer 8

1. Disqualify a nominee for election;
2. Remove a director from office before his or her term expired;
3. Questions the competence, business judgment, or character of one or more nominees or directors;
4. Seeks to include a specific individual in the company’s proxy materials for election to the board of directors; or
5. Could otherwise affect the outcome of the upcoming election of directors.