News & Analysis as of

Shareholder Approval

The “Stockholder Ratification” Defense and Investors Bancorp: What Are “Meaningful Limits” in Proposing Director Discretionary...

by Locke Lord LLP on

On December 13, 2017, the Delaware Supreme Court issued In re Investors Bancorp, Inc. Stockholder Litigation, Case No. 169. The holding of this case could be particularly impactful to Delaware corporations because of its...more

Nasdaq Proposes Modifications to 20% Shareholder Approval Rule

by Proskauer Rose LLP on

On February 13, 2018, Nasdaq proposed amendments to Listing Rule 5635(d), which currently requires shareholder approval when a company issues common stock (or securities convertible into or exercisable for common stock) for...more

Proposals Should Carefully Address Pending Corporate Deals

Lockheed Martin’s recent success in overcoming GAO protests shows that fully explaining a transaction in the works can be a key proposal element. The GAO has denied three protests of a high-profile contract award to...more

Nasdaq Proposes Changes to Shareholder Approval Rules for Private Placements

A simplified Rule 5635(d) could facilitate capital formation by changing the definition of market value. Nasdaq is proposing to update and simplify Listing Rule 5635(d) by changing the definition of market value and...more

Blog: Nasdaq Proposes To Modify The Requirement For Shareholder Approval Of Issuances Involving 20% Or More Of The Shares Or...

by Cooley LLP on

Nasdaq is proposing to modify the listing requirements in Rule 5635(d) to - (i) change the definition of market value for purposes of the shareholder approval rule and...more

“Golden Share” Equity Holder Can Bar Bankruptcy Filing

The Bankruptcy Court in the Southern District of Mississippi (the “Court”), in In re Franchise Services of North America, Inc., Case No. 1702316EE (Bankr. S.D. Miss. Dec. 18, 2017), upheld the blocking power held by a...more

Impact of Compensation-Related Litigation on Public Companies

Compensation-related litigation and threats of litigation continued to significantly impact public companies in 2017. These companies should be mindful of issues that were raised in recent litigation: proxy disclosure,...more

Compensation Season 2018: Section 162(m) and Related Considerations Post-Tax Reform

by White & Case LLP on

On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. The Act includes significant changes to the executive compensation deduction rules contained in §162(m) of the Internal Revenue Code (the...more

“You’re Not Fully Clean”: § 220 Inspection Demands Under Corwin

by Shearman & Sterling LLP on

On December 29, 2017, the Delaware Court of Chancery declined to extend the ruling in Corwin by finding that the approval of a merger by a vote of the disinterested stockholders does not act as an impediment to a properly...more

[Webinar] Outlook 2018: How companies are addressing hot-button shareholder issues and winning approval - January 18th, 1:00pm ET

by Hogan Lovells on

In conjunction with the Equilar report, Corporate Governance Outlook 2018, featuring commentary by Hogan Lovells and Donnelley Financial Solutions, this webinar will explore upcoming trends for the 2018 proxy season and...more

Delaware Supreme Court Imposes New Limits on Stockholder Ratification Defense In Connection With Equity Incentive Plans

In In re Investors Bancorp, Inc. Stockholder Litigation, No. 169, 2017, 2017 WL 6374741 (Del. Dec. 13, 2017), the Delaware Supreme Court limited the ability of directors to assert the stockholder ratification defense when...more

Knee Deep in the Big Muddy of Director Compensation and Stockholder Ratification

by Holland & Knight LLP on

• The Delaware Supreme Court delivered a gift to the plaintiffs' bar with its recent opinion reversing the Court of Chancery's In Re Investors Bancorp, Inc. Stockholder Litigation decision. • This decision, the first...more

Discretionary Equity Awards to Directors Subject to “Entire Fairness” Standard of Review

by Dorsey & Whitney LLP on

Human nature being what it is, the law, in its wisdom, does not presume that directors will be competent judges of the fair treatment of their company where fairness must be at their own personal expense. According to the...more

Delaware Supreme Court Limits Stockholder Ratification Defense for Director Compensation Decisions

by Shearman & Sterling LLP on

Last week, the Delaware Supreme Court, in In re Investors Bancorp, Inc. Stockholder Litigation (“Bancorp”), reversed the Delaware Court of Chancery and held that awards granted to directors under a stockholder-approved equity...more

Delaware Supreme Court Reins in Stockholder Ratification of Director Compensation

• Directors were not entitled to stockholder ratification defense where stockholders only approved the general parameters of director and employee bonuses • This marks the first time in nearly 60 years that Delaware’s...more

Boards Beware: Delaware Supreme Court Limits Application of Deferential Standard for Reviewing Director Equity Awards

On December 13, 2017, the Delaware Supreme Court issued an opinion, In re Investors Bancorp, Inc. Stockholder Litigation, Case No. 169, holding that, except under limited circumstances, the court will not apply the...more

Informal shareholder resolutions: the Duomatic principle revisited

by Dentons on

A recent Court of Appeal decision has considered whether the Duomatic principle of unanimous informal shareholder consent can be invoked where one of the shareholders is a company which has been dissolved....more

NASDAQ Proposes Revisions to Shareholder Approval Rules

by Dechert LLP on

Nasdaq, Inc. recently requested comments regarding possible updates to its “20% voting rule.” That rule, adopted in 1990, requires Nasdaq listed companies to obtain shareholder approval when issuing 20% or more of its stock...more

Court Reverses Summary Judgment For Directors Because They Could Not Consent To Their Own Breaches of Fiduciary Duty

by Winstead PC on

In Corley v. Hendricks, three individuals (Gaylen, Dan, and Corley) operated a business as shareholders, officers, and directors. No. 02-16-00293-CV, 2017 Tex. App. LEXIS 3846 (Tex. App.—Fort Worth April 27, 2017, no pet....more

NASDAQ Solicits Comments on Shareholder Approval Rules

Nasdaq posted the following notice and request for comment: “Last year, Nasdaq, solicited comments on our shareholder approval rules. These rules were adopted in 1990 and have remained largely unchanged since then. The...more

Special Considerations in California M&A Deals

by WilmerHale on

In addition to the deal-structuring issues that typically arise in any acquisition, M&A transactions involving a party incorporated or based in California raise a number of special issues and opportunities. Some of these...more

A Shareholder Consent In Its Dotage May Or May Not Be Valid

by Allen Matkins on

California Corporations Code Section 603(a) broadly authorizes shareholder action by written consent...more

Appraisal Rights in Maryland

by Miles & Stockbridge P.C. on

With the recent focus on appraisal rights in the Delaware Court of Chancery, it was only a matter of time before a Maryland court took up the issue. Although originally authored in April 2016, the Circuit Court for Baltimore...more

Another Reminder that Director Limits set forth in Equity Plans Allow Director Compensation to be Reviewed under the more Lenient...

Earlier this month, in In re Investors Bancorp, Inc. Stockholders Litigation, the Delaware Court of Chancery reiterated its view that placing a meaningful limit on director equity awards to be granted under a stockholder...more

The Delaware Chancery Court’s Columbia Pipeline and Saba Software Decisions: Lessons beyond Corwin

Two recent decisions from the Delaware Court of Chancery faithfully apply the Delaware Supreme Court’s holding in Corwin v. KKR Financial Holdings LLC. No surprise there. Corwin held that when “a transaction not subject to...more

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