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CALIFORNIA CORPORATE & SECURITIES LAW

Ascertaining Shareholder Intent Using A Borda Count

In yesterday’s post, I described how an approval voting system could be used to determine shareholder preferences.  The Borda count system is another system that also could provide more accurate information about the consensus opinion of shareholders. The Borda count system is named for Jean-Charles de Borda, an 18th century French mathematician with a practical…

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Approval Voting And Determining Shareholder Intent

In this post last week, I wrote about the Dodd-Frank Act’s requirement that companies subject to the SEC’s proxy rules include in their proxy statements a resolution regarding the frequency of shareholder advisory votes on executive compensation.  I noted that a plurality vote rule is not be the best way to determine shareholder preferences and…

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Counting The Vote When There Are Three Choices

Section 951 of the Dodd-Frank Act requires companies that are subject to the SEC’s proxy rules to include in their proxy statements “a separate resolution subject to shareholder vote” to determine whether a shareholder vote on executive compensation will occur every 1, 2, or 3 years.  However, the Dodd-Frank Act specifically declares that this vote…

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Did The California Legislature Dip Into The Future And See Email?

California Corporations Code § 1600 grants a shareholder or group of shareholders holding specified percentages of a corporation’s outstanding voting shares the absolute right to inspect and copy the corporation’s “record of shareholders’ names and addresses and shareholdings”.  The the legislature enacted this statute in 1975, long before e-mail was widely known or used.  Thus,…

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CalPERS Responds (Slowly) To PRA Request for Rule 14a-8 Letters

Last November, I submitted a Public Records Act request for all letters sent by the California Public Employees Retirement System to companies with respect to CalPERS’ submission of a shareholder proposal pursuant to Securities and Exchange Commission Rule 14a-8. The time period covered by my request was September 1, 2010 to November 24, 2010. It…

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“One Man Is As Good As Another Until He Has Written A Book”

A few years back, I had the great pleasure of serving with Bruce Dravis as Co-Chairman of the Corporations Committee of the Business Law Section of the California State Bar.  The American Bar Association’s Business Law Section will soon be releasing a new and updated version of Bruce’s book on independent directors – The Role of Independent Directors in Corporate Governance. …

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Just What Is An Initial Transaction Statement?

When shares of a California corporation are subject to a restriction on transfer or other specified conditions, Section 418 of the California Corporations Code requires that this fact “appear on the certificate, the initial transaction statement, and written statements”.  This, of course, raises the question of what the Code is talking about when it refers to…

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The Internal Affairs Doctrine – California May Not Be Standing Alone

Delaware lawyers undoubtedly regard the Delaware Supreme Court’s decision in VantagePoint v. Examen, Inc., 871 A. 2d 1108 (Del. 2005) as the last word on the internal affairs doctrine.  In that case, the Delaware Supreme Court held that the internal affairs doctrine trumps a California statute, Corp. Code § 2115, imposing specified provisions of the California General Corporation Law…

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Will Delaware Exclusive Forum Bylaws Founder on the CGCL’s Rocks?

Many practitioners took note last spring when Vice Chancellor Laster wrote “if boards of directors and stockholders believe that a particular forum would provide an efficient and value-promoting locus for dispute resolution, then corporations are free to respond with charter provisions selecting an exclusive forum for intra-entity disputes.”  In Re Revlon, Inc. S’holders Litig.  Since then,…

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Time To Reevaluate The Meaning Of Director Qualifications

In 2003, the Securities and Exchange Commission began requiring companies to disclose “any specific, minimum qualifications that the nominating committee believes must be met by a nominating committee-recommended nominee for a position on the company’s board of directors, and a description of any specific qualities or skills that the nominating committee believes are necessary for…

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