Shareholder voting

Question 1

How often are shareholder meetings held? why are they held?

Answer 1

at least once a year, held to elect directors & to seek shareholder approval of other matters that require shareholder approval.

Question 2

What is a quorum?

Answer 2

The minimum # of directors needed for a binding vote

Question 3

What is the DE action that can be taken instead of a shareholder meeting?

Answer 3

A written shareholder consent. Must have a majority of the voting shares.

Question 4

How much notice is required for a shareholder meeting?

Answer 4

at least 10 but no more than 60 days prior

Question 5

What is the record date (shareholder voting)

Answer 5

It determines who can vote & in what proportion

Question 6

What is proxy voting?

Answer 6

the signed appointment in writing of an agent to appear & vote on behalf of the shareholder.

Question 7

Are all shares equal in voting?

Answer 7

Generally, the rule is 1 share = 1 vote but different classes of stock can alter that rule.

Question 8

What type of shareholder voting does DE have?

Answer 8

an absolute majority

Question 9

Absolute majority shareholder voting

Answer 9

A majority of all total shares is required

Question 10

Simple majority shareholder voting

Answer 10

A majority of all shares that voted is required

Question 11

When are directors up for election?

Answer 11

directors are typically up for election at the same time during an annual meeting, but terms can change this dynamic.

Question 12

What are the methods for voting for directors?

Answer 12

○ Plurality (top vote-getter wins)
○ Majority ( needs more than 50%)
○ Cumulative (each voter gets votes that can be placed anywhere)

Question 13

How may directors be removed?

Answer 13

shareholders may remove directors with or without cause, unless the articles restrict this to for cause

Question 14

What are the three non-passive shareholder actions?

Answer 14

○ Making recommendations on how the company should be run.
○ Removing/replacing directors
○ Amending bylaws

Question 15

When both shareholders and directors wish to amend the company’s bylaws, whose interpretation is superior?

Answer 15

The board’s

Question 16

When may a director election be contested?

Answer 16

1) During a hostile takeover, directors in favor or against the takeover. If the ones in favor win they can make the company take the “antidote.”
2) An activist investor who is dissatisfied w/ management and is trying to gain influence.

Question 17

To what type of company does the SEC’s rules on proxy solicitation apply?

Answer 17

public companies

Question 18

What is a proxy solicitation?

Answer 18

Communications that are reasonably calculated to result in requesting proxies or influence the shareholder’s votes.

Question 19

What do the SEC proxy solicitation rules entale?

Answer 19

○ Tells you the type of disclosures needed and how the info has to be presented
○ No false or misleading statements about any material facts or the misleading omission of a material fact.
○ Requires a corp to provide specified proxy assistance to requesting shareholders & allows shareholders to submit shareholder proposals.