How A Voting Shift Can Cut Short A Director's Term

Allen Matkins
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Upon hearing that a "voting shift" has occurred, one might infer that there has been some change in the historical voting patterns.  The California General Corporation Law, however, defines the term very differently:

"'Voting shift' means a change, pursuant to or by operation of a provision of the articles, in the relative rights of the holders of one or more classes or series of shares, voting as one or more separate classes or series, to elect one or more directors."

Cal. Corp. Code § 194.7. 

The term, "voting shift", is found in one other statute within the GCL.  Section 301 generally provides that directors hold office until the expiration of the term to which they were elected and until a successor has been elected and qualified.  However, the articles of incorporation may provide that directors hold office for a shorter term to effectuate a voting shift.

For example, the articles may provide for the automatic termination of the term of office of one or more directors to allow for the election of a new director or directors by a class or series of shares as a result of a voting shift.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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