Keith Paul Bishop

Keith Paul Bishop

Allen Matkins Leck Gamble Mallory & Natsis LLP

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Court Declines To Declare “S” Corporation Shareholders’ Agreement Unenforceable

In general, shareholders of a corporation that has elected to be taxed under Subchapter S of the Internal Revenue Code are taxed on corporate profits regardless of whether the corporation makes any distribution of those...more

7/27/2015 - Articles of Incorporation Board of Directors Corporations Code Income Taxes IRC Public Policy S-Corporation Shareholder Distributions Shareholders Shareholders' Agreements

When It Comes To Director Compensation, California Is Not Delaware

Yesterday, I wrote about my disagreements with the approach to director compensation adopted by the Delaware Court of Chancery in Calma v. Templeton, 114 A.3d 563 (Del. Ch. 2015) and Seinfeld v. Slager, 2012 Del. Ch. LEXIS...more

7/24/2015 - Board of Directors Corporations Code Director Compensation Equity Compensation Fairness Standard Interested Parties Restricted Stocks

No Calm In Delaware After Calma v. Templeton

In derivative suits, cases are essentially lost and won at the motion to dismiss stage.  Unless the defendants succeed in winning dismissal, they must confront an unhappy choice between continued litigation with all of its...more

7/23/2015 - Board of Directors Business Judgment Rule Corporate Governance Delaware General Corporation Law Derivative Suit Executive Compensation Fairness Standard Independent Directors Motion to Dismiss SEC Shareholders

Are Delaware Directors Deathless?

I’ve noticed that the drafters of corporate laws seemed to have overlooked the mortality of directors.  Section 141(b) of the Delaware General Corporation Law, for example, prescribes the term of directors as follows...more

6/24/2015 - Board of Directors Contract Drafting Corporate Charters Delaware General Corporation Law Directors

Before Rapunzel There Was Rudabeh

In Koehler v. NetSpend Holdings, Inc., 2013 Del. Ch. LEXIS 131 (Del. Ch. May 21, 2013), Vice Chancellor Sam Glasscock III wrote “In fact, NetSpend appears more Rapunzel than Penelope; she must, it seems, let down her hair or...more

6/16/2015 - Board of Directors Delaware General Corporation Law Duty of Care Exculpatory Clauses Merger Agreements Private Equity Revlon Standard Share Price Shareholders Target Company

Is The SEC Confused About Who Solicits Proxies?

In reviewing some recent proxy bylaw provisions, I noted that some refer specifically to solicitations “by the Board of Directors”. See, for example, a bylaw provision recently adopted by Monsanto Company. This reference to...more

6/15/2015 - Board of Directors Monsanto Proxy Voting Guidelines Rule 14a-8 SEC

Should Directors Be Required To Have Valid Passports?

Lately, I’ve had occasion to think about director qualifications. Section 212(b)(4) of the California Corporations Code permits the bylaws to to specify the qualifications of directors.  In Section 141(b),the Delaware General...more

6/9/2015 - Board of Directors Bylaws Corporations Code Delaware General Corporation Law Fiduciary Duty Passports

Court Finds No “Road of Imprudence” or “Chasm of Equity” In Section 25501

Faithful readers of this blog will be familiar with the structure of the California Corporate Securities Law. Part 5 of the CSL (Cal. Corp. Code §§ 25400 – 25404) proscribes various conduct and Part 6 (Cal. Corp. Code §§...more

6/3/2015 - Board of Directors Corporate Officers Corporations Code Joint and Several Liability Securities

CalPERS Board Member Contests Attorney General’s Conflicts Position

Last December, I wrote about J.J. Jelincic, a long-term CalPERS employee who was elected for a four-year term to the Board of Administration of the California Public Employees Retirement System (aka CalPERS). Following Mr....more

4/24/2015 - Board of Directors CalPERS Carbon Emissions

How Many Board Members Are Required To Take Action?

Suppose your corporation has a five member board of directors but two seats are vacant.  Suppose further that your corporate bylaws included the following two provisions: A.  Three members of the board shall...more

4/21/2015 - Board of Directors Bylaws Corporate Governance Corporations Code Quorum

I understand Chair, Chairperson, Chairman and Chairwoman But Not Chairwomen of the Board

In February, I posted this little rumination on the origin of the term “chairman”. Then I came across SB 351 introduced late last month by the California Senate Committee on Banking and Financial Institutions. Currently...more

3/9/2015 - Board of Directors Corporations Code Legislative Committees

Court Refuses To Break Board Deadlock By Appointing A Provisional Director

Section 308 of the California Corporations Code provides for the appointment of a provisional director when a corporation has an even number of directors who are equally divided and cannot agree as to the management of the...more

2/5/2015 - Board of Directors Corporate Governance Corporations Code Directors Power of Appointment

The SEC’s Rule 14a-8 Process Just Became Even More Pointlessly Outré

Yesterday, Broc Romanek posted on SEC Chair Mary Jo White’s Friday surprise with respect the no-action letter request submitted by Whole Foods Market, Inc. Readers may recall that in December Whole Foods had obtained the...more

1/20/2015 - Board of Directors Mary Jo White No-Action Letters Proxy Access Rule Proxy Statements SEC Shareholder Activism Shareholder Proposals Shareholders Whole Foods

Commissioner Gallagher Posits SEC Would Prevail Against Harvard University

Just this week, Commissioner Daniel M. Gallagher and former Commissioner Joseph A. Grundfest issued a draft of a paper that takes on the Harvard Shareholder Rights Project. The Harvard SRP describes itself as “a clinical...more

12/12/2014 - Board of Directors Harvard University SEC Shareholders Universities

Judge Orders Stockholder To “Register” Correspondence With The SEC

Many boards operate with a high degree of collegiality, even when the directors disagree. Some don’t. When the board of directors of Gas Natural Inc., a publicly traded natural gas holding company, voted to remove its CEO...more

11/26/2014 - Annual Meeting Board of Directors Corporate Officers Defamation Proxy Voting Guidelines Shareholders

Nevada’s Duty Of Care Standard Fails To Win Summary Judgment For Director

NRS 78.138(1) imposes two explicit duties on directors in the exercise of their powers: they must act in good faith and with a view to the interests of the corporation. This contrasts with Delaware case law which speaks of a...more

11/12/2014 - Board of Directors Duty of Care Good Faith Professional Liability Summary Judgment

Why Does Determining A Quorum Have To Be So Complicated?

California’s quorum requirement for meetings of directors appears on its face to be straightforward – a majority of the authorized number of directors constitutes a quorum of the board for the transaction of business. Cal....more

10/9/2014 - Board of Directors Corporate Governance Directors Quorum

Bill Aims At Clarifying Status Of Ex Officio Directors

Yesterday’s post considered the various paths to becoming a director under the California General Corporation Law. The California Nonprofit Corporation Law defines “directors” in a similar fashion but makes it clear that the...more

10/3/2014 - Board of Directors Directors Non-Profits

Just How Many Ways Are There To Become A Director?

Lao Tzu is said to have written that there a many paths to enlightment, but how many paths are there to becoming a director? To answer the question, let’s look at the definition of “directors” in the California General...more

10/2/2014 - Board of Directors Directors

1, 2 or 3 Years? How Should Boards Decide The Frequency Of Say-On-Pay Votes?

Although the initial ruckus over how to determine the outcome of executive compensation say-on-frequency votes has subsided, I still maintain that the Securities and Exchange Commission botched the rule (§240.14a-21(b)). ...more

9/29/2014 - Board of Directors Corporate Governance Say-on-Pay SEC Shareholder Votes Shareholders

When A Corporation Dissolves, Do The Directors Become Zombies?

Even though a corporation has dissolved, there may still be a need to take certain corporate actions. For example, the corporation may need to continue to prosecute or defend lawsuits, file a final franchise tax return, or...more

9/5/2014 - Board of Directors Corporate Dissolution Corporate Governance Directors

Does The Corporations Code Permit “Boards R Us”?

In an article published last summer, Professors Stephen Bainbridge and M. Todd Henderson argued that “significant gains that could be realized by permitting firms (be they partnerships, corporations, or other business...more

9/4/2014 - Board of Directors Corporate Governance Corporate Management

Stockholder Proposal Seeks To Ratification Of All Decisions And Actions

For the last six years, Amerco as included a rather unique stockholder proposal in its proxy statement. It’s there again this year. Basically, it asks the stockholders to ratify and affirm all decisions and actions by...more

8/4/2014 - Annual Meeting Board of Directors Corporate Governance Corporate Minutes Meeting Minutes Officers Shareholders Voting Powers Voting Rights

California Dividend Statutes Found To Preempt Common Law Claims

Chapter 5 of the California Corporations Code imposes specific limitations on “distributions to shareholders”, a term defined in Corporations Code section 166. Directors who approve the making of any distribution to...more

7/22/2014 - Board of Directors Dividends Preemption Professional Liability Shareholder Litigation Shareholders

Does A Director Have A Contractual Right To Compensation?

Yesterday, I wrote about stockholder challenges to director compensation. Today’s post considers what happens when a director joins a board. When someone is invited to join a board, she may ask about compensation. The...more

7/9/2014 - Board of Directors Director Compensation Directors Oral Contracts Proxy Statements Shareholder Resolution

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