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Can An Employment Agreement Be A Wee Bit Too Integrated?

The Bylaws of many public companies provide for mandatory indemnification of directors and officers (and sometimes other agents as well). Often, Bylaws describe these indemnity obligations as contract rights. For example...more

10/22/2014 - Bylaws Corporate Officers D&O Insurance Directors Employment Contract Indemnification Publicly-Traded Companies

Forum Selection Clauses Were Here Before They Were In Bylaws

Recent rulings by judges in Delaware and other states have given impetus to the adoption of exclusive forum bylaws. To the casual observer, the idea might seem entirely novel. But as Koheleth (the Gatherer) wrote “What has...more

10/21/2014 - Breach of Duty Bylaws Corporate Officers Delaware General Corporation Law Derivative Suit Directors Forum Selection Clause Internal Affairs Doctrine

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

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

Company Sues Former Officer For Failing To File Form 4s

A complaint filed in the Central District of California caught my eye because it involved the rather unusual circumstance of a corporation suing a former director and officer for, among other things, failing to file reports...more

8/26/2014 - Chief Compliance Officers Directors Professional Liability Reporting Requirements Securities Exchange Act

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

When It Comes To Director Compensation Claims, Nevada And Delaware Are Fundamentally Different

Since 1969, there has no question that directors of a Delaware corporation have the authority to set their own compensation. 8 DGCL § 141(h). Having authority to do something, however, doesn’t mean that the use of that...more

7/8/2014 - Board of Directors Director Compensation Directors

Why Biolase v. Oracle Partners, L.P. May Not Be The Last Word On Resignations

Yesterday, I mentioned the Delaware Supreme Court’s recent holding in Biolase, Inc. v. Oracle Partners, L.P., 2014 Del. LEXIS 278 (Del. June 12, 2014). In an opinion written by Chief Justice Leo E. Strine, Jr., the Supreme...more

6/19/2014 - Board of Directors Delaware General Corporation Law Directors Hiring & Firing Resignation

Internal Affairs Doctrine May Not Control Alter Ego Liability

The internal affairs doctrine “is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or...more

5/21/2014 - Alter Ego Board of Directors Corporate Veil Directors Internal Affairs Doctrine Officers Personal Liability

Why October 1, 2014 Is An Important Date For Management Persons Of Nevada Entities

Two years ago, the Nevada Supreme Court in an en band decision held that a state district court may exercise jurisdiction over the nonresident officers and directors of a Nevada corporation with its principal place of...more

4/21/2014 - Corporate Officers Directors Implied Consent Jurisdiction Long Arm Statute

Directors’ Alleged Breach Of Fiduciary Duty Not Subject To Anti-SLAPP Statute

A SLAPP is a strategic lawsuit against public participation. California enacted Code of Civil Procedure Section 425.16 as an antidote to SLAPP suits. In general, a SLAPP is subject to a special motion to strike unless the...more

4/17/2014 - Anti-SLAPP Board of Directors Directors Fiduciary Duty Standard Pacific

Just Who Is Behind The Universal Proxy?

Recently, it was reported that the Council of Institutional Investors had submitted a petition for rule making to the Securities and Exchange Commission. Indeed, the CII did submit this petition on January 8, 2014. ...more

1/22/2014 - Ballots Board of Directors CII Directors Proxies SEC

“Wherever You Go, There You Are”, But Will You Be In The Proper County?

The California General Corporation Law makes numerous references to the “proper county”. For example, Corporations Code Section 304 empowers the superior court of the proper county to remove a director in specified...more

12/18/2013 - Board of Directors Corporate Governance Directors

An Unexpected Impasse

If a corporation has four directors and two shareholders, one owning 60 shares and the other owning 40 shares, it seems obvious that the majority shareholder should be able to elect a majority of the board of directors. ...more

11/13/2013 - Board of Directors Directors Shareholder Votes Shareholders

Deadlocked But Not Out Of Options

While not prohibited by the General Corporation Law, a board comprised of an even number of directors suffers from one potential disability. It can become deadlocked. When that unfortunate situation arises, there are...more

11/12/2013 - Board of Directors Corporate Governance Directors Disability

Ninth Circuit Says Say-On-Pay Suit Should Stay In California Court

In enacting the Dodd-Frank Act, Congress made it clear to everyone, other than the plaintiffs’ bar, that say-on-pay votes were advisory only, did not create or imply any change in fiduciary duties of directors, or create or...more

8/2/2013 - Directors Dodd-Frank Fiduciary Duty Say-on-Pay

Nevada Cracks Down On “Nominee” Directors And Officers

Over the years, some have promoted the use of so-called “nominee” directors and officers as a means to hide the ownership and control of a corporation...more

7/31/2013 - Compliance Directors Nominations Officers

Must Designated Directors Keep A Secret?

Yesterday’s post concerned the attorney-client privileged issues in Vice Chancellor J. Travis Laster’s recent decision in Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (April 17, 2013). I found another statement in the...more

7/11/2013 - Board of Directors Confidentiality Controlling Stockholders Directors Disclosure Personal Representatives Shareholder Rights Shareholders

Kalisman v. Friedman – A California Analysis

A few months ago, Vice Chancellor J. Travis Laster issued an interesting decision involving director inspection rights and the attorney-client privilege. Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (April 17, 2013). ...more

7/10/2013 - Attorney-Client Privilege Board of Directors Corporate Governance Corporate Officers Directors Duty of Loyalty Incorporation Inspections

“If there be nothing new, but that which is hath been before . . .”

The California General Corporation Law has imposes a single qualification to serve as a director – the person must be a “natural person”. Cal. Corp. Code § 164. Nevada’s for-profit corporation law adds the additional...more

5/28/2013 - CalPERS Directors

Directors May Be Invested With Super Powers In Nevada But Not California

Directors With Super Powers - Sometimes investors would like to endow one or more directors with greater voting powers. This is possible with a Nevada corporation by virtue of NRS 78.330(3) which provides “ The articles...more

2/5/2013 - Articles of Incorporation Benefit Corporations Corporate Forms Directors Voting Powers

Are Charter Indemnification Provisions Contracts?

Public companies typically include provisions in their articles and bylaws that mandate indemnification of directors and officers. Often, these provisions include a statement to the effect that the rights to indemnification...more

1/29/2013 - Articles of Incorporation Bylaws Directors Indemnification Clauses Officers

Forum Selection Bylaws And The California Constitution

Last December, I briefly discussed whether a forum selection bylaw with respect to officers and directors would pass muster as a contractual choice of law. See A Forum Selection Clause Issue That You May Not Have Heard About...more

1/15/2013 - Bylaws Choice-of-Law Directors Forum Selection Clause Officers Waivers

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