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CALIFORNIA CORPORATE & SECURITIES LAW

Is Section 141(d) Truly Oxymoronic?

Section 141(d) of the Delaware General Corporation Law provides that the directors of any corporation may “be divided into 1, 2, or 3 classes”.  It’s hard to make sense of this statement.  First, I don’t believe that Delaware legislature meant to provide that individual directors may be cut up into pieces.  A more accurate statement…

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Just How Many Ways Are There To Become A Director?

Lao Tzu (老子) 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 Corporation Law: “‘Directors’ means natural persons designated in the articles as such or elected by…

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California Corporation Fails To Persuade SEC That Cumulative Voting Proposal Can Be Excluded Under Rule 14a-8

Although Rule 14a-8 is a federal rule, its application often turns on state corporate law.  In most cases, the state law in question is the Delaware General Corporation Law because companies subject to the SEC’s proxy rules are most commonly incorporated in the Blue Hen State.  Thus, I’ve decided to devote today’s post and a few upcoming posts to some…

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CalPERS and Cumulative Voting

California has a strong historical bias in favor of cumulative voting in the election of directors.  In fact, California’s 1879 Constitution enshrined cumulative voting as a constitutional right.  Cal. Const. of 1879, Art. XII, § 12 (repealed).  The 1931 California General Corporation Law continued mandatory cumulative voting.  When the current California General Corporation Law was introduced,…

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