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BusOrg – Palmiter (Fall 2012)Module VI Notes (chapters 14-16)

Candace Cain10/16/12

When subsidiary is owner and operator, the only way to hold parent liable is through derivative liability must be able to pierce the corp. veil.

Alternatively, can say that the parent was the operator by virtue of its actions, and thus is directly liable.

Unanswered questions:1. Why does the Supreme Court adopt “state” PCV standards – isn’t CERCLA fed. law?

a. State piercing standards are uniform.2. Compare direct liability to PCV – different?

a. Court seems to reward laxity: Which parent corp. is better off – one that oversees its sub’s polluting activities or not?

3. Why is the S. Ct. so in awe of state-based corp. limited liability – “bedrock principle”?a. Wants to respect where corps. incorporate and private choice.

BP Oil Spill Example BP Exploration was actually a sub of BP plc, BP America, Inc., BP Corp. N.A., etc. Liability capped at $75 million. Oil Pollution Act of 1990: Responsible party= the lessee of the area in which facility is

located, or the holder of a right of useo Rule: Liability of a responsible party shall not exceed the total of all removal

costs plus $75 million. The Oil Pollution Act makes the leaseholder liable for offshore spills. Parent not liable

unless PCV. Derivative liability: Courts respect LL, but depends on parent’s $, involvement,

environmental supervision, incorporating state. ANSWER: Court is unlikely to pierce – parent will not be held liable.

o No (direct) operator liabilityo No (indirect) owner liability

Class advice: GP should accept responsibility and avoid public outcry, or set up relief/compensation fund, or liquidate, dissolve, pay SHs, and seek asylum.

Chapter 14: SH Voting Rights

Outline What and how

o Rights in fundamental transactions Voting rights Appraisal rights

o Compare: merger, sale of assets, tender offer Power to initiate


o SH resolutionso Bylaw amendmentso Removing directors/filling vacancies

Protection of voting rightso Blasius: board packingo Quickturn: dead-hand/deferred poison pills

SH self-protection Vote : Approve fundamental transactions, elect directors (annually or special), remove

directors, fill vacancies, and initiate action (bylaws, resolutions).o SHs can remove directors by voting them out in special meetings.o Citizens don’t get this same protection in the election process.o Precatory resolutions: major part of corp. landscape. Nonbinding, but show a

consensus of many SHs. Sue : Enforce fiduciary duties (derivative), protect direct rights (disclosure, voting,

appraisal, inspection)o Don’t have to go through derivative suit procedures to protect direct rights.

Sell: Liquidity (except insider trading), takeovers (tender offer)o Citizens of U.S. can’t simply leave the country when they are dissatisfied with

American gov’t.o SHs, conversely, can move (sell shares). Effect is that price of stock drops, value

overall declines. Power to sell is not totally unlimited, but it is an important disciplining rule for mgmt. and protection for SHs.

Shareholder checklist1. Financial rights2. Corp. externalities

a. Limited liability/PCVb. Criminal/environmental liability

3. Corp. governancea. SH voting rights: veto, initiateb. Information rights: inspection, antifraudc. Activism in public corp.

4. Fiduciary dutiesa. Directorsb. Controlling SHs

5. Liquidity Rightsa. Stock tradingb. Corp. deals

6. Close corp. (a corp. w/o liquidity)SH Voting Rights

1. Substance (what they vote on)a. Choosing directors: annual election, and removal/replacement of directors.b. Approve fundamental changes (usually after board initiation)


i. Amendments to articles of incorporation, Mergers/sales of assets, and dissolution.

ii. After board authorizes these things, SHs can essentially vote to veto them.c. Initiate and approve bylaw changesd. Adopt resolutions

i. Even though SH resolutions are nonbinding, board members do everything they can to satisfy SHs. They listen to resolutions.

2. Process (how they vote)a. Meetings of SHs: annual meeting, special meeting, and action by consent: SHs

may be allowed to consent in writing to something as if they were having a meeting.

b. Voting at meetings: Must have a quorum (typically 50%). Meetings must stick to their designated purpose. Proxy may be appointed to vote for a SH. Absolute v. simple majority rule (today, more common for SHs to act only by a simple majority). Supervision of voting sometimes occurs.

What is a merger? Types:

o Statutory mergero Triangular merger

Similar phenomenao Sale of assetso Tender offer

Hypo: P Corp (acquiring corp.) and T Inc. (acquired corp.) Mgmt. of P and T agree that P will acquire T. Assume P will issue 40% of voting shares as consideration. Statutory merger : Boards of both companies agree. T SHs get consideration, and P SHs

may or may not get anything. SHs of P and T must approve by default rule, but there are exceptions. P takes on all the assets and liabilities of T. The “plan of merger” detailing the terms is put together by corp. lawyers and agreed to by both boards. P SHs must approve the plan IF issuing more than 20% of your shares. P SHs have NO appraisal right (cannot force corp. to pay fair value to buy back your shares). T SHs must approve the plan, and T SHs have the right to appraisal (unless market out applies).

o Fair value: not the same thing as “fair market value” (which is the going price for your shares.) Fair value takes into account the full value of the company and your pro-rata share, and it is usually higher than the market value.


Statutory merger cont.

Appraisal


SH who is unhappy with the merger may have the right to seek a cash appraisal (fair value, judicial) of his shares.

MBCAo Market out exception: If there were a market to which SH could have sold his

shares in order to get out before the merger, then the SH has NO appraisal right.o Conflict of interest: if reason to believe that the terms of the merger were set in an

unfair way, then appraisal rights are given back.o Market out exception does not apply to close corps. because there is NEVER a

ready market for close corp. shares.DGCL

o Market exception: If there were a market in which SH could sell before OR after the merger, then SH has NO appraisal right.

o If a close corp. is merged into a public corp., after the merger there is a market for SH’s shares, so the market out exception DOES apply and SH does not have appraisal rights.

The corp. that survives after the merger (P) takes on all assets and liabilities of both P and T.

Chart of SH rights – see slide 9, Ch. 14 Statutory merger

o MBCA today P has vote, but not appraisal, rights. T has vote AND appraisal rights.

o MBCA past P has vote and appraisal T has vote and appraisal

o DGCL P and T have vote and appraisal

Triangular merger: There is a 3rd entity involved in the merger – the subsidiary of P. The sub can be a shell corporation. P’s sub acquires T, so that Sub acquires all of T’s assets and liabilities.

P corp. does this to insulate itself from T’s liabilities. P creates Sub: capitalized with P shares, approved by P board. Sub board and SHs

approve, because it’s just an outgrowth of P board. P SHs have voting right (if more than 20% issuance), but not appraisal right.

T board approves merger plan.

Reverse Triangular Merger: It is where T is the surviving corp., and Sub disappears. May prefer reverse triangular merger if P wants to keep T’s contracts, leases, intact (some contracts say that if T entity dies, the contract ends).

SH rights – Triangular merger MBCA today


o P SHs have vote, but not appraisal rights.o T SHs have both vote and appraisal rights.

MBCA pasto P SHs have no vote and no appraisal rightso T SHs have both vote and appraisal rights

DGCTo P no vote, no appraisalo T vote and appraisal

Sale of Assets Can be essentially the same as a statutory merger when all of T’s assets and liabilities go

to P. P pays consideration in the form of P shares.o Approved by P board; P SHs have voting (if more than 20% issuance) but not

appraisal rights.o Approved by T board; T SHs have voting and appraisal rights.

However, T SHs do not get appraisal rights in Delaware. After P acquires all assets (and/or liabilities) of T, T dissolves. T SHs must approve

dissolution. Doctrine of independent legal significance : If you can accomplish a transaction through a

merger, then merger rules apply. If you can accomplish same thing through sale of assets, then sale of assets rules apply.

o Can’t argue for appraisal rights for SHs when whatever relevant transaction rule doesn’t allow the right.

No matter what statute we’re looking at, T SHs have voting rights in ALL transactions. Also, the MBCA revised version always gives voting to P and T, and appraisal only to T. DGCL varies a lot.

Tender Offer Used to get control of T while sidestepping T’s board’s approval. Offering to purchase shares directly from T SHs may be harder than merger b/c SHs may

not be selling for whatever reason. Tender offer : Gets T SHs’ attention by offering well over market price for their stock, but

with a time limit (fed. law says within 20 business days), and a participation requirement (e.g. I want 51% of the shares).

o If only 25% of SHs want to buy, then that is not worth it.o Can offer SHs cash or your own shares.

P board can approve offer. P SHs have NO vote (unless P must amend articles to give more shares as consideration), and no appraisal right.

T board has no role. T SHs have no vote, and no appraisal, because they can simply decide not to take the offer.

After tender offer, P can become a majority SH. P can get rid of the minority by proposing a merger of P and T, because T board will say yes. This is because P voted in the directors.


1st step is tender offer, and 2nd step is merger.o At the merger step, T SHs have appraisal rights.

Quiz: SH voting rights1. SHs vote on (b) mergers, but not (a) fundamental changes in business (change= e.g.

business will now sell computers instead of calculators) or (c) sales of corp. assets.2. SHs do not vote on (c) parent-sub merger when parent owns 90% of sub. But, they do

vote on (a) acquisition by another corp., and (b) amendment of bylaws.3. SHs get appraisal (b) under MBCA in a court proceeding paid by company, but not (a)

when they get publicly-traded stock in merger, nor (c) for fair market value of shares (it’s fair value of shares)

4. SH meeting requires (a) notice to SHs 10-60 days before a meeting, but not (b) statement of purpose for annual meeting, or (c) a quorum from beginning to end of the meeting (director may break a quorum in a board meeting).

5. At annual meeting, (a) all directors are elected.6. SHs can (b) approve non-binding resolutions, but cannot amend bylaws if inconsistent

with articles, and cannot remove directors ONLY for cause – they can remove without cause as well.


SH Power to Initiate Action

Power to initiate: 4 ways SH resolutions Remove directors (for cause) Fill board vacancies (after removal) Amend bylaws

Auer v. Dressel (NY 1954) Considers all 4 SH powers to initiate action. Class A SHs elect 9 of the 11 board members, and common SHs elect the remaining 2. Auer was the former president; Class A SHs wanted to reinstate Auer as president, but

the current president was preventing this. SHs wanted to pass a (nonbinding) resolution endorsing Auer.

SHs also wanted to remove certain directors with cause. SHs also wanted to fill vacancies once certain directors were removed. There was no

statute to grant SHs this power at the time. Holding: Each of these powers are appropriate. Even though a resolution is an “idle

gesture,” it is legitimate because it sends notice that directors will have to answer to whether they followed SH resolutions. Auer’s presidency is related to the economic well-being of the corp., so it is valid for SHs to express their views.


o We assume that SHs have the power to initiate action if it is related to their role in the corp.

SH role is NOT to decide day-to-day management, so they couldn’t pass resolutions regarding daily management policies. They can, however, pass resolutions related to the selection of board members.

SHs cannot amend the articles – only board can authorize, and SHs can approve, amendments to articles.

o MBCA allows removal with or without cause, but articles can specify only removal with cause.

CA, Inc. v. AFSCME (Del. 2008) Considers the SH power to amend bylaws. AFSCME is a labor union. It got to be a party because it owns stock in different

companies. It is trying to maximize returns on the stock. AFSCME made a request to include a provision in bylaws to require the corp. to

reimburse SH campaign expenses. It defers to the Del. court to interpret Del. law. Del. S. Ct. is authorized to give the SEC

advisory opinions on Del. law. SEC asked the Del. S. Ct. to give an advisory opinion on whether a bylaw provision could be enacted to require reimbursement of campaign expenses.

DGCL : o Certificate may contain any provision limiting and regulating the powers of the

directors. o Bylaws – power to adopt, amend, or repeal are in the SHs. o Bylaws may contain any provision, not inconsistent with law or the cert. of

inc., relating to the business of the corp., the conduct of its affairs, and its rights or powers or the rights or powers of SHs, directors, officers, or employees.

o Board of directors manage business and affairs of every corp. SHs can initiate certain bylaws that are exclusively within the domain of SHs to amend.

Board also has certain bylaw powers that are exclusively within their domain. There is also some overlap between SHs and board bylaw powers.

Another question in case was whether amendment of bylaws would cause any problems with the board’s fiduciary duties. The bylaw would interfere with exercise of fiduciary duties.

o Board may be duty-bound NOT to reimburse expenses in some situations. For instance, if the candidate is a competitor who is going to pass on secrets.

Any bylaw might be seen as limiting the power of the board. Just because a bylaw limits board power doesn’t mean that SHs cannot pass the bylaw. The bylaw is a proper subject for SH action.

Fiduciary duties: prohibition against board violating fiduciary duties. Reimbursing expenses may in some cases hurt the corp. Doing this would cause board to violate its fiduciary duties.

SHs could draft bylaw that requires corp. to reimburse campaign expenses as long as it doesn’t violate fiduciary duties.


o “Fiduciary out” proviso: contract term that says that we will not impose anything by contract that would lead to the violation of fiduciary duties.

Campbell v. Loew’s (Del. 1957) Considers SH powers to remove directors for cause, fill board vacancies after removal,

and amend bylaws. Loew’s is a publicly held corp. Two minority factions vying for control of the board.

Vogel faction calls SH meeting to amend bylaws to increase # of directors, remove 2 Tomlinson-faction directors, and fill director vacancies with Vogel-faction directors.

Holding: SHs have the power to remove directors for cause. SHs have power to remove directors with or without cause, by default. SHs have power to fill board vacancies, even though the board also has this power.

o For cause =directors doing something illegal or something that is harming the corp.

o SHs must serve director with notice of the charges and afford him a full opportunity of defending himself.

o Since SHs have the authority to choose their mgmt. team, the power to remove a member of the team should also belong to SHs.

o SHs have the inherent right between annual meetings to fill newly created directorships.

o SHs have inherent power to remove directors for cause even where there is a provision for cumulative voting. Must have notice and opportunity to be heard.


Take note – changed assignments for the rest of the semester (see Materia on website)

Last class: SH resolutions are nonbinding, must related to SH’s economic interest in corp., but no

need to get board permission to create resolutions. SH inherent right to remove directors. Removal power can happen outside of the annual

meeting. Whether SH can get special meeting for this purpose is determined by statute. SHs and board can amend bylaws separately; in some cases, board and SH powers to

amend overlap. Certain bylaws are exclusively within SH jurisdiction to amend.

Board Responses to SH Initiatives

Limits on the board in responding to voting insurgency:


1. Fiduciary dutiesa. No interfering with SH voting.

i. Blasius: only when “compelling justifications” exist for interfering with voting.

b. Adopting “shark repellents”: anticipatory structures that make it harder for someone to seek control of a company (by voting off the incumbent board, by making tender offers)

i. BJR: if approved by SHsii. Heightened duty: Board as negotiator for SHs.

2. Limits on power (ultra vires)a. Amend bylaws

i. CA v. AFSCME : SHs can amend bylawsb. Adopt poison pills

i. Quickturn : Directors must retain independent judgment.

Blasius Indus. v. Atlas Corp. (Del. 1988)1. Corp. has 7 incumbent board members and an insurgent 10% SH.2. Blasius (SH) delivered a signed written consent to increase the board to 15 members w/

bylaw amendment, to place 8 named people on the board, and to adopt a corp. restructuring plan.

3. Board didn’t want this to happen b/c they had their own restructuring plan. Emergency board meeting results in bylaw amendment to increase the size of the board to 9, and then the appointment of 2 new board members.

4. Holding: a. The board acted consistent with articles of inc., which set up a staggered board (2

or 3 directors elected at any one time), and which SHs approved. b. Board’s action was without conflicting interest, b/c their position wasn’t

challenged by Blasius’s board-packing plan. c. Board’s action was in good faith (motivated to protect SHs from threat of

dangerous recapitalization program). d. HOWEVER, board’s decision doesn’t fall under the BJR, because it is not

exercising control over operations and is manipulating franchise.e. There should not be a per se prohibition against interfering with SH vote.

Sometimes board should have a role, and may know better than SHs.f. There SHOULD be heightened review – board needs compelling justifications to

interfere with vote.

Corp. democracy (Blasius) The legitimacy of director power rests in the SH vote. Action designed to interfere with vote involves conflict between board and SH majority. Theory of corp. law gives power to directors as agents of SH, not as Platonic masters.

Quickturn Design Systems v. Shapiro (Del. 1998) Bidder initiates 2-step takeover of Quickturn: (1) Proxy context to replace board, and (2)

tender offer with a 50% premium, 20% below high.


There was a poison pill in place in the acquired company. Poison pill=board initiated plan that gives SHs rights as soon as a hostile bidder comes up. These rights give SHs ability to dilute financial interest of any acquirer not approved by the board.

Bidder wanted to replace the board to get rid of the poison pill. Quickturn board responded with 2 defensive acts: (1) amended bylaws to delay SH-called

meeting for 90-100 days, and (2) amended poison pill to delete the “dead hand” feature, and add “deferred redemption” (new directors cannot redeem for 6 months.)

o Dead hand : only directors who were incumbents can redeem a poison pill. Neutralizes the power of directors.

Holding: o Board has power to manage business and affairs of corp. Board has power to

introduce deferred redemption provision.o However, this delayed redemption provision would deprive a new board of its

authority to manage business and affairs, as well as fiduciary duties. You can’t have 2nd class board members.

o Board CANNOT pass a provision that prevents board from completely discharging its fiduciary duties. DRP restricts board’s power to negotiate sale of the corp. DRP is invalid.


Scavenger hunt questions will be on the midterm. We will not go over all of them.

Ch 15: SH Information Rights

Inspection rights Procedure:

o Qualified SHo Expedited court review

Proper purpose – SWM Proper SH

State law Notice Duty of disclosure

Federal law Proxy regulation Proxy antifraud rule

o Private cause of actiono Elements: materiality, culpability causationo Remedies (rescissionary damages)


Fiduciary duties vs. Power Bylaws cannot jeopardize ability to exercise fiduciary duties Board must have independence of action to do whatever it is generally empowered to do:

to conduct the business and affairs of corp.

SHs have inspection rights in order to fully exercise their voting power. Important mainly for public corps. Permit SHs to effectively vote, voice concerns, sue, and sell.

o Used to value company’s shares, to be pre-lawsuit discovery, and to allow for full knowledge.

DGCL § 220: Stockholder : holder of record of stock, or the beneficial owner of stock.

o Beneficial holder: stock actually held in a voting trust or by a nominee on that person’s behalf.

Stockholder has the right to inspect stock ledger, list of stockholders, and other books and records for any proper purpose. A proper purpose is a purpose reasonably related to such person’s interest as a stockholder.

State ex rel Pillsbury v. Honeywell, Inc. Antiwar activist was opposed to Honeywell’s production of fragmentation bombs. He bought shares in the company just to have a voice in order to stop company’s

production of fragmentation bombs. Court held that the power to inspect is the power to destroy. Honeywell’s board should

have the right to make any kind of ammunition it wants. π had no interest in Honeywell before he learned about its production of fragmentation

bombs. However: “We do not mean to imply that a SH with a bona fide investment intent could

not bring this suit.” Can a SH have a purpose other than shareholder wealth maximization (SWM)?

o This question remains unanswered by the case.

Saito v. McKesson HBOC McKesson acquired HBO. There was first an agreement, then actual consummation of

merger. HBO became a wholly-owned subsidiary. HBO’s financials turned out to be flawed, requiring a restatement of the financial

statements. π wanted documents from around the time of the merger to see if McK officials knew

about the problems with the financial statements. Also wanted to see if 3rd party advisers knew about the problems. π brought suit, and the court told π to use his inspection powers to get more info.

Holding: π needs to see the documents from before he was a SH, because the wrong could have been committed or based in events that occurred long ago.

Books and record inspection is a lot like Rule 34 document request.


Court allows multiple proper purposes in this case. Court here invents proper purposes, like the ability to use SH voice in addition to the ability to bring suit.

Statute provides guidance on when parent SH can obtain documents about the subsidiary. DE doesn’t give SH the information in the litigation that he needs early on – SH then

must exercise inspection rights.

Del. GCL § 220

Corp. has a record list of SHs that it must give to a SH seeking inspection rights. However, this list is not helpful. It lists only those people who own “of record.” 80% of people of record who own are “CEDE & Co.”

Need CEDE breakdown to know who the actual SHs are. Some SHs object to revealing identity to corp. They are non-NOBO. Other SHs consent to having identity revealed. They are NOBO.

o Need to seek the NOBO list. Shareholders Broker-Dealer Depositary Trust & Co. (CEDE & Co.)

Deephaven Risk Arb v. UnitedGlobalCom Encumbered shares: shares that have a contrary financial position to other SHs. Want

share price to decrease because you are “borrowing” the share, and want to sell at a high price and buy at a low price for a profit.

“Short” = selling shares, desire decreasing price. Contrary interest. “Long” = actually buying shares, desire increasing price Court will not get into the question of whether you are net short or net long in the corp.

As long as you are a SH as specified by statute, you are entitled to inspection.


Proxy regulation State law (notice) Federal law (proxy solicitation)

Last class: SHs get information to vote, voice, sue, or sell. Inspection rights are central to these 4 rights. Rule 34 information request is similar to the corp. inspection process.

Proxy card hypo: “I hereby appoint Jeffrey Immelt as my proxy, to vote all my shares in his discretion.”

Not accompanied by any other statement or information. Corp. law says that this is ok as long as it is in writing, signed, and ONLY lasting for the

next 11 months. Sufficient that it specifies that proxy applies to the 2012 annual meeting.


In the 1920’s, corp. management sent out proxy cards like this to SHs, asking them to sign and appoint the CEO as their proxy. Then, they would vote in egregious ways. This gave management full authority to do whatever it wanted.

PROBLEM: (1) Does not give out proxy statements to state what issues will be discussed at the meeting. (2) Does not list other matters besides election of directors that will come up at the meeting. (3) Does not describe SH proposals.

Federal regulation of PHC voting Public company

o Securities (debt or equity) listed on stock exchange.o Securities (equity): 500 holders + $10 million year-end assets.o Deregistration: delisting or fall below 300 SHs.

Proxy solicitationo (1) Request for proxy, (2) Request against, (3) “Reasonably calculated”o 2nd Cir: Part of a continuous plan intended to end in solicitation.

Federal proxy regulationo Form of proxy – not open-ended

Each matter= Yes, No, or Abstain. Directors: For/Withhold (plurality voting)

o Proxy statement: information on matters to be voted on.o Annual report to SHs, if directors are to be elected.

Plurality voting: Director needs only to receive more “for” votes. Can only choose “for” or “abstain.”

Majority voting: Director wins if receives 51% of votes of the SHs that showed up to the meeting. Can vote for or against.

Can revoke vote by consenting in writing that you revoke. Can also send in another proxy card as long as it is within the voting period. This proxy

would supersede the other proxy.

Board must include SH proposals, even if Board recommends voting against the proposal. This is due to SEC disclosure rules.

Management does have a chance to explain why it opposes the proposal.

In GE’s proxy statement, there are lots of provisions for executive compensation.

There are also 4 SH proposals: There is already majority voting, and no staggered voting at GE. (1) Cumulative voting: SH can put all 10,000 of their share votes on one candidate, and

none toward any other candidate. Can split share votes any way SH wants.o Did not pass.


(4) SH action by written consent: SHs cannot vote to change articles because board would have to initiate it.

o Did not pass.o Sometimes board in such situations where the vote is so close (45-55) will go

ahead and change to reflect it.

Annual report looks more like a political advertisement than an annual report. Lots of pictures of people Carefully chosen shots of management team – background is a long hallway that looks

like it’s going “into the future.”

Beattie: CEO of a Canadian corp. Probably on GE’s board because greater chance that he will be independent.

Tons of former CEOs on the board. A few politicians on the board. Number of lawyers on boards is rising.

GE is the most prolific energy company worldwide – has bought all of the new energy technologies.


Chapter 16: Public SH Activism

Theories of public corporation Berle-Means: separation of ownership and control Role of SHs

o Manne: market for corp. controlo Easterbrook and Fischel: nexus of contractso Roe: political producto Stout and Blair: team productiono Bainbridge: board-centric

Law of SH activism Rational apathy: collective action problem Changed calculus: institutional investors State law: no-reimbursement rule Fed. law: SH communications

SH Proposal Rule Operation of rule: SEC no-action review Proper proposals


o Ordinary business exclusiono SH access

Information in SH voting State law: minimal notice (abuse)

o State law subject to great abuse because you need not make many disclosures. Federal law: Securities Exchange Act of 1934

o Proxy cardo Proxy statement (including executive compensation)o Annual report

Federal proxy fraud cases (US Sup. Ct.)o Material misstatement

Fails to fully disclose – for example, fails to mention the fact that company did not consider other merger partners.

o Reliance presumedo Causation shown if vote necessary for transactiono Court remedy includes rescissionary damages

= Difference in what the shares would be worth today if there had been full disclosure and hence no merger (because SHs would not have voted for it).

State proxy fraud cases (Del Sup. Ct.)o Same elements as federal proxy fraudo Except reliance not presumed (class actions not possible)

No class actions as a practical matter.

SH Democracy Robert Monks: successful businessman and investor Corp. should be more democratic.

o American SH cannot nominate, remove, or communicate information to directors (except at the “arbitrary pleasure of the SEC”)

o Bringing a proxy insurgency is extremely expensive (millions of dollars) and there is a huge possibility you will not be reimbursed.

o SH ownership is a metaphor. Owning shares in GE is not the same thing as owning a house.

o “Democracy is a cruelly misleading word to describe the situation of the American SH.”

Vocab:o Democracy: gov’t by the people.o Corpocracy: gov’t by the corp.o Kleptocracy: gov’t by corp. criminals.

Separation of ownership and control Separation between the financial aspect of ownership and control of the mechanisms of

the system.


Annual meetingo Notice to record SHso Election of directors and approval of resolutions happenso Nominations can happen at meeting, but at that point, you have no votes – voting

has already happened by proxy. Must turn in nominations by November and go through a complicated process.

Proxies authorizedo Written appointment/authorization of agent.

Can’t condition appointment on the success of getting on the board, having salary approved, etc.

o Revocable/limited duration: 11 months under MBCA. Proxy solicitation

o Distribution of proxy materialso Mgmt. uses corp. funds

Almost seems unfair – it is like incumbent president using gov’t funds for his own campaign expenses.

Gives incumbents huge advantage, but it is allowed.o Outsiders must use own funds

However, SH proposals’ only cost to SHs is the cost of postage. Simply need to mail off the request for proposal.

GE SH meeting recording by Jeffrey Immelt (CEO) Opened with personal story of how GE began. Very political

Classic US Corp. Adam Smith: “Wealth of Nations”

o Stock companies have an overlay between the people who supply capital and those who are involved in corp. control.

Modern corp.: capital is externalized.o Separation of ownership and control.o Capital comes from diverse public investorso Berle and Means theory

Proposed federal solutions to inherent problems in corps.o Managers use proxy process to ensure their incumbency. Corp. law weak in

enforcing standards because of fiduciary duties and BJR. Berle and Means’ recommendations reflected in the Securities and

Exchange rules.

Quiz1. Reformists (Berle and Means, Clark): D – Separation is anti-capitalist. SHs should

have more disclosure rights, mgmt.. more fiduciary duties to offset corp. power.


2. Contractarians (SH 1st; Easterbrook/Fischel, Manne): C – Separation is efficient. SHs protected by control markets. Law should protect markets and review “end period” tax.

3. Political realists (Roe, Miller and Macey): B – Law fostered separation. SHs disempowered by politics; fear of concentrated money.

4. Team theorists (Stout, Blair): A – Law accepts separation. SHs let corp. boards mediate capital/mgmt./labor disputes.

5. Contractarians (Board 1st; Bainbridge): E – Separation empowers board. SHs permit board to be Platonic guardian. Law should minimize SH activism.

Hypo: Corporate voting issue Milton Friedman: Corp. should only give out profits; SHs are better off that way. You are chair of Probity’s voting committee. Probity is the largest US mutual fund

group. FAW is activist investment pool. It has targeted Bloated, Inc. for spending too much on

community and social programs. FAW plans to put 3 new directors on the 7-person Bloated board. FAW has actively

solicited proxies from other institutional investor, including Probity. Probity owns 5.7% of Bloated. How should Probity vote these shares? What theory of

corp. law should probity follow?o Probity should vote in favor of the new directors. SHs want more dividends and

greater return on stock, not giving away all corp. profits to CSR.o Probity wants to argue for the Berle-Means reformist theory. That is because this

theory is pro-SH information and pro-increased fiduciary duties. With more information, more SHs would know how much the corp. is giving away to CSR and probably would not want that to continue happening.


Last class hypo: Corp. voting issue Class results: (Descriptive) Theory of firm is contractarian (majority view of class).

One group chose reformist theory; one group chose board-as-master theory. (Normative) Theory of firm should be reformist, contractarian, or team (3-way tie). 2

groups said board as master theory. No group chose political theory. Class split on how Probity should vote. 5 “pro” FAW Friedman slate, 5 against. Exam will likewise ask for descriptive statement, normative statement, and end result of

the problem.

Mac commercial in 1984 Presented IBM as the old dictator being smashed by the young woman in color that

represents Mac. Seated people in commercial are similar to the passive SHs complying with the wishes of

the all-powerful board of directors.


SHs will not spend the time or money necessary to contest the board. Whether you put in the time and money or don’t, it is always a better deal not to spend the time and money. Someone else will do it, and you will end up being better off.

o Prisoner’s dilemma: Two criminals separated by police. If one confesses and the other doesn’t, the nonconfessor gets a huge prison sentence and the other gets moderate. If both confess, you both get a moderate prison sentence. If neither confesses, you both get a very tiny sentence. It is in your best interest to confess because you avoid the harshest sentence, no matter what your friend does.

SH Voting: SHs don’t know how the other SHs are going to vote. Maximizing strategy is to assume that SHs will vote in your best interest, because that way you save the time and money costs of collective action.

Hypo: You own GE stock. You want Immelt out. Individual investor: 1,000 shares. Institutional investor: 200 million shares (2%). Institution investor might have the requisite cost-benefit ratio to put in the time and

money costs of collective action. Individual investor might not.

Institutionalization (“deretailization”) Fewer individual investors; more institutional investors. People are investing through an intermediary. Fewer direct owners. Investment companies

o Mutual funds: 27% Mutual funds get money primarily from retirement plans under which

employer doesn’t guarantee how much employee will get, but promises to put a certain amount in investments.

o Hedge funds: 3% Pension funds

o Private: 9%o Public: 14%

Banks (trusts and estates): 0.5% Insurance companies: 8% Securities firms: 0.5% State/local gov’t: 0.8% Endowment funds: 1.5% Foreign institutions: 13%

o Major change in the last several years.o Incentives for investors to go to U.S. Europe investments are not as good.o Bought a lot of mortgage-backed securities. Argued that this caused the “bubble”

that was the global market problem. TOTAL INSTITUTIONS: 77%

Legal limits on SH activism: State reimbursement rule + Federal limits on SH communications


Rosenfeld v. Fairchild Engine & Airplane Insurgent group going after the body of SHs; incumbent group likewise going after SHs

vying for power. Insurgents were successful (very rare); previous board had spent corp. money on their

own reelection. Insurgents covered the ousted board members’ expenses from corp. money, as well as

their own expenses.o SHs overwhelmingly approved the board in reimbursing insurgents’ expenses.

Holding: Incumbent board only gets reimbursement if there is a policy question. Incumbents should be covered essentially always, but insurgent scan only get reimbursed if they win.

Long Island Lighting v. Barbash Federal law case. Insurgent SH is trying to get LILCO to be a public utility rather than a private corp. This

would drive costs down. Insurgent has to provide proxy statement, file with SEC and get it approved, and

distribute statement to all the SHs. Citizens public interest group upset – customers and SHs unhappy with LILCO b/c of

mgmt.’s plan to build an expensive power plant.o Published ad calling to replace LILCO. Advocated making LILCO a public

power authority. Since a public utility would not have to pay dividends to SHs, company could pass savings onto customers, reducing rates by up to 50%.

o Court held that the ad WOULD influence SHs on how to vote, that it was a proxy statement that needed to be vetted by the SEC.

o Question was what was ‘reasonably calculated’ to reach SHs and influence their vote. Here, court held that it was reasonably calculated b/c there was a potential connection with Matthews (the insurgent SH).

Judge Winter dissented, stating that this was a form of censorship.


LILCO (2nd Cir.): An outside group that are not SHs expressing views on whether a business should be owned as a public utility (due to customer rate concerns, environmental concerns, etc.) in a general source like a newspaper could be a proxy solicitation.

Dissent expressed concern with free speech. Wanted to interpret rule to allow pamphleteers, speaking out by outside groups.

SH Communication Rules When SHs want to communicate among themselves. It is ok if SH owns less than 5% to communicate via email. Rule 14a-2(b): Proxy statement delivery requirements do NOT apply to:


o Any solicitation by any person who does not seek the power to act as proxy for a security holder and does not furnish or otherwise request a form of revocation, abstention, consent, or authorization.

Rule 14a-3: Proxy statement delivery requirements do NOT apply to:o Speeches in public forumso Press releaseso Published/broadcast opinionso Advertisements in broadcast media, newspaper, other bona fide publicationo PROVIDED THAT no form of proxy, consent, or authorization is provided to a

security holder through the communication AND a definitive proxy statement is on file with SEC when communication is made.

SH Proposals Rule 14a-8 Procedure for submission Basis for exclusion SEC’s role

Timeline: “Living with Sarbanes-Oxley” (see Ch. 16 Slide 25) Gradually advocated more oversight and SH involvement in corp. governance. More expectations of directors. 2003: A majority of corp. directors must be independent. 2005: Enron and WorldCom directors held personally liable to settle SH litigation.

SH Proposal Rule SH Proposal : A recommendation or requirement that the company and/or board take

action, which it intended to be presented at a company SH meeting.o SH proposal can be a requirement when it is a bylaw amendment. SHs can

specify that the bylaw amendment is nonreversible. Eligibility : SH that has continuously held at least 1% or $2,000 worth of shares, and

continues to hold those stocks through the date of the meeting, for at least 1 year. SH may submit no more than 1 proposal per company per SH meeting. Proposal may not exceed 500 words. Deadline for submission : 120 days before the date of company’s last-year proxy

statement. Listed in the proxy statement. If you fail to follow a procedural or eligibility requirement, company may exclude

proposal. However, you will get notice and an opportunity to correct the problem. Within 14 days, company must notify you of the problem.

Other bases for exclusion:o Improper under state law; not proper subject for SH action.o Relevance; related to operations that account for less than 5% and that are not

otherwise significantly related to company’s businesso Management functions: related to ordinary business operations.


SEC has opportunity to save your proposal from exclusion, or otherwise affirm company’s decision to exclude.

Lovenheim v. Iroquois Brands SH was concerned about the manner in which supplier produced pate de foie gras, related

to animal rights. SH submitted proposal to require a committee investigation into the methods used in

production. Company said that it was a very small part of its business – less than 0.5% of company

revenues. Excluded proposal. SEC agreed with company. Issued a no-action letter. Issue: How is the proposal relevant to the company’s business? Holding: Proposal doesn’t have to be economically relevant to be relevant. Can be

politically or socially relevant.o Judge bases decision on SEC position in 1976.o There could be consumer backlash if people learn of the cruel treatment of geese

in the production of foie gras.o It’s not enough to just be “interested” in the treatment of animals to get SH

proposal through.

SH Proposal Headings: (see Ch. 16 slide 36)- WHEREAS,- BE IT RESOLVED:- SUPPORT STATEMENT

Law on Social/Political Proposals

Medical Committee case (1972) Mgmt can’t treat corp. as “personal satrapies.” Must include proposal on napalm sales

SEC Interpretive Release (1976) Significant policy, economic implications Beyond ordinary business.

SEC no-action letters (1976-1991) Requests for EEO reports includable (1983) (involved equal opportunity concerns for

gays and lesbians) EEO policies includable

Cracker Barrel (1992) SEC affirms staff: EEO “ordinary” Even though tied to social issue


Reversal of Cracker Barrel (1998) Resubmission; case reversed.

Proposals “excluded” by mgmt. 1981-82: More operational proposals excluded than either governance or social/political. 1991-92: Fewer operational proposals excluded; more governance proposals and

social/political excluded. 2001-02: More governance proposals excluded.

Proposals found includable Over time, governance proposals gradually found more includable. Social/political proposals went up and down. Lately, more includable (41%).

Nell Minow, author: There is not a bright line distinction between what used to be social policy issues and straight SH-value concerns.

GE SH proposal example Asked for cumulative voting to help get some minority representation on the board. Over time, slightly more SH proposals have received majority support.

o Ex) To rescind supermajority voting, 62%. Require SH approval of poison pills, 58%.

o Mutual funds are more activist than other SHs, giving support especially for governance proposals.

Candace Cain11/1/12

Dan Pedrotty – class visit

Graduated Wake, worked for law firm in Philadelphia. Originally wanted to do public interest and advocate for workers. Activist pension funds are long-term pools of capital. Institutional investors do surveys with beneficiaries of pension funds. System is broken – set up consumer protection bureau, increased protections and duties in

general. Dodd-Frank Act: first time coalitions of SHs lobbied Congress and identified what they

wanted in legislation. Americans for Financial Reform: his coalition. People who didn’t want Dodd-Frank Act: the banks, but depends on issue. Some

companies are more outspoken about proxy access versus other things. Citizens United : made carrying out public interest more difficult. Opened floodgates to

targeting particular members of Congress. However, it has been effective for litigation. Slows down implementation through litigation.


Will be working with Harvard group. Year old program. Leaders, people on board of trustees of the pension funds are isolated which makes them less effective stewards of their beneficiaries’ money.

o California: 9-member board decides when, where to invest. People have a few outlets for education but mostly on their own.

o Pension funds challenged by financial crisis – lost huge amounts of money.o Trustee should know up front what fees are involved and what returns are

expected – makes for a more informed decision. Hedge fund vs. treasury returns: treasury returns are outperforming hedge funds. Had

you put money in treasury fund, you would have double your money compared to hedge fund.

Need to ask upfront for layman’s terms of where returns come from, exactly what the hedge fund does. Their methods are often opaque.

Pension funds need to have a way of knowing when they are being ripped off. Institutional investors control 75% of equity in the market. Pension funds are a small

class (15%) of institutional investors, and this number is declining. Say-on-pay is a bigger issue in corps. Concern with incentivizing, performance-based

compensation. New laws are making people more vocal on SHs’ behalf. ISS targets companies that have poorly-aligned pay packages compared to performance.

o ISS has hundreds of analysts who make recommendations on how institutional investors should vote on pay packages, election of directors.

o Useful because institutional investors can’t keep up with all the different companies in which they own stock. ISS manages this for them, advising them on how to benefit as a SH.

o Similar to a coach coaching both offense and defense.o ISS is consolidating its power. They have increasing prominence and power. On

any given vote, ISS controls between 25-30% of the vote. Companies follow the ISS recommendation.

o Don’t even need a contract to know the recommendation. The ISS recommendation is made public.

Big issue on the horizon of corp. governance: Boards need to change and become better advocates for SHs. For example, GE should have more institutional investor representation on their board.

o Right now it is management dominated. They don’t know what SHs really want. Germany: economy is fairly healthy. There is a system where workers who see ways to

make company more efficient can sit on the board. This has worked well also in Japan.o Not socialist, but actually capitalist.o When companies had the most problems, that was when workers were trying to

notify higher-ups of the problem, but were being ignored.


John Nail10/16

1. Chapter 14 – Shareholder Rightsa. Shareholder self-protection

i. Corporate law is a series of self-protection devices for shareholders ii. 3 main components

1. Self-protection vote – makes sure what is happening the corporation is what the shareholder wants on a macro level. Compare to powers of citizens in the US voting process.

a. Approves fundamental transactions – very limited number of such transactions. Corp has more veto rights for shareholders than the US provides citizens

b. Elect directors – can’t be taken away, fundamental. Directors can even be removed during special meetings.

c. Remove directors/ fill vacanciesd. Initiate action – vote to amend bylaws, etc. Big new horizon

and is an expanding area2. Sue – powerful enforcement mechanism

a. Derivate suits – can step into the role of the corporation to protect their rights

b. Protect rights directly by suing as themselves3. Sell – compare to citizens just leaving the US. Shareholders can leave

a corporation to cause price to drop, which affects director interestsa. Liquidity – can’t sell all the time, but most of themb. Takeovers

b. Corporate governancei. Shareholder voting rights

1. Information rights – right of shareholders to get information from corp2. Activism in corporate governance – expansion in the field

ii. Sue rights – fiduciary dutiesiii. Liquidity rights – ability to selliv. Close corp – a public corp w/o liquidity

c. Shareholder voting rightsi. Substance – what shareholders vote on

1. Choose directors – there is an annual election and there can also be removal/ replacement of directors at different times

2. Approve fundamental changesa. Requires BOD approval


b. This becomes a veto right for the shareholders for amendments to the AOI; mergers; dissolution

c. Shareholders do NOT have a right to veto changes in the business of the corporation

3. Initiate and approve bylaw changes – this is very important4. Adopt resolutions – this is intended to give the shareholders to the

ability to tell the BOD that they are/ aren’t happy w/ performance/ actions

ii. Process – how SH vote1. Meetings

a. Required annual meetingb. Special meetingsc. Action by consent – similar to BOD getting consent

2. Voting at meetingsa. Must be quorum – usually 50%, can be changed by bylawsb. Can vote by proxy – change from BOD. This allows for

another to vote for the SH. c. Many St statutes makes it easier for SH to act w/ simple

majority as opposed to absolute majority iii. Mergers

1. Business people call any kind of combination of businesses a merger but a statutory merger is the legal term

2. Acquisitiona. Size does not determine which corp can acquire the other –

small corps can acquire large companiesb. Corps can issue any type of consideration – shares, cash, credit,

anythingi. Used to be only shares could be offered for shares – not

the rule any more3. Statutory merger

a. BOD of both companies must agree to mergeb. Voting SHs of both companies must approve the merger plan –

this is default, but there are ways around thisc. When a merger occurs – the acquiring/surviving corp is the

only one that existsi. Liabilities of the other corp is assumed by the surviving

ii. Different for IP rights – signing over those rihts must be by signed agreement

d. Plan of merger – corp counsel will jockey to plan the merger. This is what the BODs agree upon


i. If the acquiring company is issuing more than 20% issuance – the SHs must approve the plan

e. Appraisal – i. Fair MKT v. fair value – fair MKT is what a MKT will

pay for a given share (it is much less for minority shareholders); fair value is the pro rata share of what the corporation is actually worth.

ii. Giving SH the ability to get fair value is to protect for issues/ risks they didn’t paln to assume and now want out of

f. Acquired company SH i. Always gets a vote on the merger plan and an appraisal

in MKT out situations. 1. MKT out – have to have a right to sell before

the merger in a public market. This assumes that the MKT reflects current value of the corp

2. MKT out only applies when there is a MKT – doesn’t apply for closely held companies where there isn’t a MKT

John Nail 10/17

4. Statutory merger (cont.)a.Where the statute sets up how the merger will occur

i. SHs get two protections1. Can veto the merger plan2. Appraisal show shareholders who are unhappy w/

the merger. Get cash out by judicial process – different under MBCA and DE

a. MBCA i. Don’t get appraisal w/ MKT out

exception. If there is a public MKT before or after the merger OR the shareholders get cash in the merger, can’t get appraisal

ii. Don’t get appraisal w/ MKT out excpetion. If there is some type of COI that shows the merger was unfair in some manner – SHs get appraisal rights back. EX of COI –


(1) squeeze out mergers (2) mgmt buy-out

b. DE i. Simpilier “MKT exception”. If

there is a MKT before or after, must use the MKT. If the process is cash out, then the SH can seek appraisal if it is NOT enough cash.

b.Before stat merger – two companies -> After – one companyi. Acquiring company assumes the liabilities of the acquired

companyc.All shareholder rights under DE, MBCA, R-MBCA is in chart on

pg 376d.Stat mergers is the gold standard for merger types

5. Triangular Mergersa.This is a 3 entity transaction – acquiring company (P), acquired

company (T), and shell used by acquiring company (S)i. P creates S out of nowhere

1. S is capitalized w/ P’s shares2. S shareholders is the BOD of P – therefore P can

vote on the transaction3. P SHs do NOT get a vote under DE law, but they

do get a vote under MBCA IF there is a 20% issuance of shares (dilution)

ii. T BOD approves merger plans and T SHs have the right to vote and normal appraisal rights

iii. This insulates P from the liabilities of Tb.After the merger

i. In forward triangular merger – the S survives the mergerii. In a reverse triangular merger – T Corp continues to

survive. This would be preferential in some cases b/c T continues to survive as a company and nothing has to be switched over

6. Sale of assets a.This is NOT a plan of merger – this is a K sale

i. BODs of P and T must reach agreement regarding the sale of assets

ii. T shareholders always have to vote1. In MBCA – get the right to appraisal 2. In DE – does not get appraisal


iii. P shareholders get the right to vote under MBCA if there is a dilutive share issuance, but it does NOT trigger if there is a cash sale

b.After – two corps existi. T still exists w/o assets but w/ consideration from the sale

– the corp dissovles and distributes consideration1. BOD of T must propose dissolution and the SHs

must apprive itc.Doctrine of Independent Legal signifgance – the set of rules that

apply in a merger/ sale of assets applies separatelyi. This prevents sharehodlers in P from arguing there is a de

facto marger to get appraisal ii. Cts in DE say that this is just how the parties planned the

sale and those laws apply in that type of transaction7. Comparison of 3 forms

a.MBCA – treats all three transactions functionally the sameb.DE – the three forms can be treated must

8. Tender offer a.P corp attempts to purchases shares directly from the SHs of T to

circumvent T’s BODb.Tender offer is intended to buy shares of T above MKT value for a

minimum of a XX% of shares w/n a specified time limit i. Intended to get the attn of T SHs

ii. If the required % isn’t met w/n the deadline, then the offer passes

c.P BOD can approve the offeri. If this is a cash offer, SHs do NOT get to vote and there is

NOT apprasialii. If this is for stock – if the BOD must get authorization for

more shares, SHs must vote. Otherwise NOd.T BOD gets NO vote/ say in the matter

i. T SHs get to decide whether or not they want to sell their shares, there isn’t a massvote

ii. SHs do not get appraisale.P can get rid of the minority by approving a merger w/ T after

getting majority share of T, electing BOD, and approves the merger

i. T minority SHs may still have appraisal rights – stay tuned for Weinberger

d. Pop quiz


i. Shareholder do NOT get vote on – parent-sub merger )when parent owns 90%+ sub – there really isn’t a reason to vote here, it is going to happen

ii. Shareholders get appraisal – in judicial proceeding paid for by the company1. Under MBCA – Corp pays for the judicial proceeding2. DE – requires the SHs to pay

iii. Shareholder meeting requires – notice to SHs (10-60 days before a meeting)1. Directors can break a quorum in meeting; SHs can’t break quorum

iv. At annual meeting – all directors are elected. This is a default rule1. There can only be up to 3 classes of directors in staggered elections –

not 5. v. Shareholders can – approve non-binding resolutions

1. AOI/ Bylaws can require directors to be removed only for causee. Shareholder power to initiate

i. Power to initiate – Auer v. Dressel1. Facts – BOD is composed on 11 directors w/ 9 elected by class A

SHs, 2 elected by common SHs. Former president wants to be reinstated – gets the class A SHs to want to get him back. Class A want a special meeting w/ 3 purposes

a. Explain that the SHs liked the former president and want to get him back – doesn’t tel the BOD to do anything

b. Amend AOI and bylaws to allow SHs to fill vacancies to be filled by the SHs – there isn’t a statute on point here

c. Vote on removing 4 directors w/ cause – must come up w/ bill of impeachment to get them out

2. Ct holdings a. Shareholder resolutions – this doesn’t bind the BOD, but it is

relevant to SH voting to let the BOD know that they might need to answer to the shareholders regarding resolutions

i. Stockholders expressing approval of conduct isn’t binding, but does NOT bind

ii. Though it isn’t binding – doesn’t invalidate SH expression

b. Remove directors – assume that the SHs have power to remove directors UNLESS it has been taken away

i. This gets to the SHs right to be involved in this process

ii. Even if there is something in the AOI that gives the BOD power to remove directors, doesn’t stop SHs from exercising the same power


iii. The AOI must explicitly take the power away from the SHs – otherwise, the powers given to BOD must work w/ power of the SHs

iv. Ct acknowledges that the SHs have the right to remove c. Amend bylaw

i. It would seem that the SHs would have the ability to remove directors, then they likely can amend the bylaws regarding this situation

ii. This doesn’t get to the ability of SHs to amend the AOI – the BOD must first authorize the amendment

3. CA, Inc. – deals only w/ amending the bylawsa. Facts – case pending before the SEC, SEC asks two questions

to DE Ct. This is an attempt to have the bylaws amended to allow reimbursement of expenses for election of minority BOD. ∏ is a labor union that wants to max return on investments in corps. SEC is unable to answer the question b/c this is a question of St law (DE) and this is a question of first impression – unusual for certified questions to go in this manner.

b. Issuesi. Is this a proper question for SHs to propose?

ii. Does this bylaw violate the law?c. DE law

i. § 102(b) – AOI may limit/ regulate the powers of directors

ii. § 109(a) – power to adopt, amend, repeal bylaws is in the vote of SHs

iii. 109(b) – Bylaws may contain any provision not inconcistent w/ the AOI the relates to the business

iv. § 141(a) – business affiars of the corp is under the direction of the BOD unless otherwise provided in the AOI

d. Ct holdingsi. If the bylaws deals w/ a process (how voting occurs,

nomination, etc.) then it is appropriate for SHs to provide this type of power – this deals w/ the power structure of the corp and ability to amend bylaws

1. If the AOI/ bylaws give power to the BOD to amend, appeal, repeal, then the power should


be seen as concurrent, but not equally coextensive

a. The BOD likely has more power than the SHs – sometimes the power may overlap, but the BOD has power to do some things that the SHs can’t do

b. If there is overlap of power – the SH power trumps BOD power

2. The SHs could have amended the bylaws regarding expenses in an election b/c it is process and could have prevented the BOD from changing it

3. SHs can step into the power of the BOD as long as it is process oriented

ii. This proposal would cause Δ to violate DE law – this gets to the duty of the BOD in regards to this amendment

1. Limiting the power of CA directors to act w/ full discretion b/c this would violate the fiduciary duties of the BOD

2. Even though there is a reasonable expense provision in the bylaws, there isn’t a prohibition of the BOD from supporting something that violates the best interests of the corp

3. Redrafting the bylaw – there must be a fiduciary out which gives the directors the ability to not follow the bylaw if it would violate fid duties

4. Campbella. Facts – BOD packing proposal to increase the number of

directors and remove two of the remaining directors. This is a strategy to return power to a faction w/n the corp

b. Issues and holdingsi. Amend the bylaws to increase # of directors – this is

the power of the SHs to do b/c it is process related1. This can’t violate the AOI – as long as it is

consistent w/ the AOI, process bylaw is ok


ii. Removal of directors – when there isn’t a limitation w/n the AOI and the bylaws, then the default rule is that the SHs can remove directors for OR w/o cause

1. Even when the BOD has been given power to remove, it doesn’t reduce inherent power of the SHs to remove directors

2. For cause means that something is illegal or something that is harming the business

3. Notice requirements iii. Fill director vacancies w/ Vogel directors – if the SHs

have the authority to choose their BOD, then the pertinent rights of the BOD should include to fill the vacancies w/ their choices

1. SHs have inherent right to fill vacancies 5. Review of cases

a. Shareholder resolutions – must be nonbinding and relate to the economic interests of SHs

i. BOD should pay attn b/c the SHs are sending a message and the SEC has set up mechanism for ensuring resolutions get into proxy materials

b. Removals of directors – there is an inherent power that can happen anytime, not just meeting

i. Removal for cause MUST give notice to the director and allow for them to respond to the charges

ii. BOD doesn’t have power to remove directors c. Power to fill vacancies – this is coextensive power btwn the

BOD and the SHsd. Power to amend bylaws – another overlapping power btwn

SHs and directorsi. There is a hierarchy – SHs have more power to amend

than BOD1. DE doesn’t give power to BOD unless it is in

AOI2. Bylaws passed by SHs as non-amendable is

binding on the BODii. What power do SHs have?

1. Process – SHs can pass bylaws that amend process (election, reimbursement, etc.)


2. Some things that SHs can NOT touch – probably something along the lines of business which is exclusively in the hands of the BOD

6. How do Cts respond to SH initiatives?a. Limits on the board

i. Fiduciary duties1. Interference w/ SH voting can NOT occur

unless there are compelling justifications (Blasius)

2. Shark repellants – makes it harder for voting out BOD or seek tender offer. Less of a standard than Blasium

a. BJR – if approved by SH b. Heightened duty for BOD when they

act as negotiator for SHsii. Limits on power

1. Amend bylaws – SHs can amend the bylaw BUT the BOD must retain independent judgment (CA competing w/ Quickturn)

b. Blasius – cornerstone of DE lawi. Facts – SH gets ~10% stock ownership on the MKT.

∏ has written consent from SHs to control company to recommend Δ restructure, amend bylaws to increase BOD size, elect 8 new BOD members. All of these are allowed for SHs to undertake. BOD doesn’t want this to occur, so they amend the bylaws to increase BOD size and fill vacancies. BOD separately has this power to undertake this as well.

ii. Standard of review – BOD doesn’t have COI expect for keeping their jobs. Ct finds that the BOD wants to protect the SHs from themselves in GF – this plan will hurt SHs/ corp financially and this is a terrible plant.

1. Ct finds that this type of BOD action would normally fit the BJR but SH vote is NOT subject to the BJR

2. BOD is not exercising control over operations and is inapplicable when attempting to manipulating the franchise of the SHs

iii. Per se prohibition – this is NOT appropriate


1. Ct finds that there might be some instances where the BOD has compelling justifications (protecting a merger, etc.) where this type of use of power is appropriate

iv. Corporate democracy – SH franchise is the ideological underpinning upon when legitimacy rests

1. The theory of corp law confers power upon directors as agents of the SH, it does NOT create Platonic masters

c. Quickturni. Facts – Mentor wants to merge w/ Quickturn to avoid

patent issues. The process was a tender offer, put in a friendly BOD, then have a back-end merger. Mentor wanted to replace the BOD before even taking over the corp.

1. This was an attempt to avoid the BOD from adopting a poison pill plan – this gives SH rights to dilute the financial interests of any acquirer w/o the approval of the BOD

2. BOD amended bylaws to change deadhand provision for a Deferred Redemption Plan

a. Dead hand – this means only the directors elected prior to acquisition can exercise full power. DE Cts do NOT like these – reduces the power of the BOD

b. DRP – new BOD can’t exercise poison pill for 6 months. Gives time for BOD to determine if the plan is good. This is protected by the BJR

ii. Ct held that the BOD has the power under these issues, but this isn’t the end of the issue

1. The problem is that the BOD can’t limit the powers of BOD

2. Reducing power of new BOD for a 6 month under the DRP creates a new class of director

3. Doesn’t matter if the DRP only limits authority in one area – selling the company – this would require the BOD to breach fiduciary duty


John Nail10/24

2. Chapter 15 – SH information rightsa. Mid-term – be prepared to answer some of the scavenger hunt questions. 4-5

questions on the mid-termb. What do Cts see voting rights as entailing?

i. When BOD interferes w/ voting rights 1.Ct says this is NOT w/n the business and affairs of the corp for the

BOD to decide what is in the SH best interests, this means BJR doesn’t govern. Blasius

2.Ct limits the ability of the BOD to make it more difficult for acquisition of the corp – action isn’t available if it limits the fidiuciary duties of the BOD. This means that the BOD doesn’t have the power to change future ability of the BOD. CA

c. How does a SH get information from a company?i. Inspection rights are the way in which SH are able to fully exercise rights

1.Gives the information for voting2.Allows the ability of the SH to voice concerns3.Protects the ability of the SH to sue – pre-litigation discovery4.Helps value the company’s shares in deciding whether to sell

ii. DE statute – important points1.Identifies stockholder as holder of record OR a beneficial holder of

stocka. Holder of record would be what the company lists as who

actually owns the stock. Usually can be listed on stock ledger

b. Beneficial owner – SHs who are receiving the benefit of the stock but the SHs are held by another firm

2.Stockholders can inspect information (stock ledger, list of stockholders, and other books and records)

a. List of SHs different from stockholder ledger – List of SHs gives the beneficial owners

3.Proper purpose – must be given by the SH to inspect. Purpose is proper when purpose is reasonably related to the SHs interest

4.Burden of proof is on the corp to prove purpose isn’t proper when the SH alleges proper purpose

iii. State ex rel Pillsbury1.Facts - ∏ is an anti-war activist who buys 100 shares of Δ to try and

replace the BOD to stop production of anti-frag mines. ∏ doesn’t


seem to be interested in the long-term benefit of the Δ – doesn’t argue that he will hold the shares if the Δ complies.

2.If there is a proper purpose – doesn’t matter if there is a bad 2d purpose. This is the DE rule. MN doesn’t seem to care about this

3.The power to inspect is the power to destroy 4.The Ct seems to have tunnel vision – SH role is off in the back lot,

not in direct regards of what the business does in a social sensea. Is this bad lawyering? – Maybe the Ct wasn’t even

interested in the alternative arguments5.Can SHs have a purpose other than wealth max – Ct seems to hold

that any purpose that is social purpose, you will be kicked outa. This is different from DE, might be ok as long as there is

another proper purpose6.Would the result have changed if the SH was attempting to gain

information of the business of the bombs?a. There would be an even higher standard for proper purpose

if the SH was attempting to get this information b/c he must show interest is in the business of these bombs

b. Might be different in DEiv. Saito

1.Facts – Mckesson merges w/ HBO. After the merger, HBO showed it had big financial problems, which required restating financials that dropped the value of the post merger corp. ∏ buys shares in McKesson after the agreement to merger and wants information regarding the merger. ∏ wants docs from both corps and 3d party advisers of McKesson. ∏ purpose is an attempt to bring a derivative suit against the corp.

2.Ct held that a. It is a proper purpose for a SH to find docs to bring a

derivative suiti. This can be used to prevent wasting time of the Ct

to show there will be a case – DE requires that there is a case made before the lawsuit is brought

b. SH can get docs from prior to the date he/she bought stock in corp b/c there might be a need to prove there is an ongoing harm.

i. This is a protection for the SH. This makes sure that the SH can bring the lawsuit effectively


c. SH can get inspection of 3d party docs that the corp has in its possession – can’t go directly to the 3d party to get them. They must be related to the

d. SH can get docs from other corp if they were given to the parent before the merger

3.This is very similar to a Rule 34 document request, not like disclosures given to SHs – those are often much more general.

4.Ct allows for multiple proper purposea. The Ct may even invent the purpose – even though it is

related to litigation, it might also be related to other SH rights

5.SHs can become subject to confidentiality agreements to inspect certain information

a. This doesn’t get to atty-cl privilege informationv. Who is the stockholder?

1.Other countries – every company maintains constantly updated list of SHs

2.In US – corp maintains list of SHs a. Record list is the list of ONLY SHs of record – usually is

CEDE & Co., which holds for brokerage firms who hold for individual investors

b. Actual SHs are usually beneficial owners i. NOBO – Nonobjecting Beneficial Owner allows the

brokerage firm to tell the corp who is the beneficial owner. Corp will then communicate w/ SH directly

ii. Non-NOBO – doesn’t give this information. The brokerage/ CEDE just tells the corp how many SHs they have and the corp will send the information directly to the brokerage firm to distribute the information

c. Beneficial owners are still protected to be to bring suits3.Deephaven risk case

a. Encumbered shares/ empty shares – those that have a contrary financial position

b. SHs can short the shares to bet against the company. Makes money in a falling MKT

c. Deephaven owns both long and short positions – issue is, does it matter is a SH that is betting against the corp get inspection rights in the company?


i. Ct says this type of question becomes too complex – if there is at least 1 share that is long, that is enough to entitle the SH to inspection.

ii. Doesn’t matter that the SH may have a contrary interest

John Nail10/25

3. Proxy regulationa. Talking about how SHs get information to vote; express themselves; sue; and exitb. Anti-SH attitude in Honeywell has been replaced pro-SH mentality for inspection

rightsc. SH disclosures

i. Disclosure rules were a part of the Exchange Act ii. This is an overlay over St laws – federal law just creates the disclosure

processd. GE disclosures

i. Proxy from SHs ensure that there will be quorum for the annual meeting 1.Proxies are proper under St agency law – this gives proper authority2.St corp law doesn’t really say a lot about proxies –

a. It must be in writingb. It must be signedc. Can only be valid for 11 months

3.Federal law creates requirements for proxiesa. Proxy must define what the SH is voting on, otherwise the

SH is blind regarding what their votes are used fori. 1920s this would create these types of agencies w/o

there being proper disclosure about what the issues will be voted on

b. There must a proxy stmt about what the SH is voting on – compensation; mgmt proposal; SH proposals; audit approval; etc. – there must be sufficient explanation

c. Proxy card must state exactly what is going to happen at the meeting and give opportunity to vote yes, no, abstain

4.Corps that are required to provide these disclosuresa. Corps sold on stock exchangeb. Securities have 500+ holders + $10 million year-end assets

(applies to NASDQ corps)


c. Degreistartion – difficult – must get off exchange or fall below 300 SHs

5.Proxy solicitation a. Must contain (1) request for proxy (2) request against (3)

be reasonably calculated to lead the SH to voting in one way or another

6.Federal proxy regulationa. Form of proxy – can’t be open-ended

ii. GE materials1.SHs often don’t get the material in physical form – it is expensive

and the SH pick up the tab, so most get it via online2.For Holders of XX/XX/XX - sets the record date to define the SHs

who get the vote 3.If items are agreed online then the proxy card must be able to

connect to the annual report and proxy statement4.GE has majority voting – each director must receive the majority of

votes for each seat. It is the majority of all who attend – abstain increases the number that the director must get to remain a director

a. In plurality voting – it is only for or abstain b. If a directors doesn’t get a majority – DE law allows the

BOD to fill the positionc. There are 3 ways to revoke proxy – tell them revoked,

show up at meeting, send later proxy5.Proxy stmt – satisfies federal and state law

a. Why does the corp always state they are opposed to SH proposals?

i. SH proposals MUST be included in the proxy stmt b/c it will occur at the meeting AND mgmt must disclose it

ii. SH proposals that mgmt accepted are withdrawn, that is why the only proposals at the meeting are being opposed by mgmt – they are the only ones being disputed

b. Approving mgmt pay – big deal now. Please agree w/ the mgmt proposal for pay. GE SHs approved ~80% (less than 90%+ average)

c. SH proposal – cumulative voting to allow for SHs to focus votes to get person on the BOD. Give minority representation – can get Ralph Nader on the BOD. Got defeated


d. SH proposal for resolution on written consent almost got 45% - this is the type of number that people

6.BOD makeupa. Not allowed to have competitors on the BODb. When constructing the BOD, it makes a lot of sense to

bring in people from different sectors, academics, politicians, etc.

c. ISS – institutional shareholder services tells people how to vote shares

John Nail10/29/12

4. Ch 16 – SH activisma. Important to know what the academics/ policy makers do in the area of SH

activismb. Information in SH voting

i. St law requires minimal notice to SHs – this can lead to abuse b/c there is no requirement to specify how the agent must vote

ii. Exchange act tries to fix this problem – sets the form of the proxy card/ information in the proxy stmt, etc. and the annual report is required to be given to SHs

iii. Federal Proxy fraud cases – we skipped this reading1.If a proxy stmt is sent out and it fails to fully disclose information

the BOD is aware of – this amounts to fraud2.Material misstatements can be opinions and reliance is presumed

when the information is sent out to shs3. Causation can be shown if vote is necessary for the transaction to go

forward4.Ct has broad remedy power – includes the power to alter the deal

retroactivelyiv. Most litigants usually turn to St Ct

1.DE SupCt requires disclosure of information to SHs as a matter of fiduciary law

2.If is not possible for these actions to bring class action b/c individual reliance must be shown on the information – institutional investors have the power to still use this provision b/c they have sufficient number of SHs

c. SH democracy


i. Robert Monks – leading spokesperson on SH activism and the corp should become more democratic.

1.SHs can’t nominate, remove, or communicate w/ the BOD as a practical matter – democracy is a misleading word

2.Democray – gov't by the people3.Corpocracy – gov't by the corp4.Kleptocracy – gov't by corp criminals

d. Overview of SH votingi. Annual meeting – notice to record SHs, elective of directors/ approval of

resolutions; nominations at the meeting (but usually before the meeting b/c the voting has happened beforehand

1.Happens after the financials have been turned in ii. Proxies are authorized – written appointment of an agent to vote. Most

proxies are recovcable in a fairly simple process or are revoked in 11 months

iii. Proxy solicitation – distribution of proxy materials that is generally governed by the corp. Outsiders must use their own funds while the corp is allowed to use corp funds for own re-election

1.SH proposals must be piad for by the corp iv. Proxy tab – already tabulated before the meeting, usually announced

e. SEC recognizes that investors get information regarding the corp onlinef. Earlier theories of the firm

i. Adam Smith – there is an overlay between capital funders and entrepenuers.

ii. Modern corp (Berle) – capital is externalized and there is a separation of ownership and control

1.Mgmt uses the proxy process to ensure incumbency and there is limited information that must be given to the SHs

g. Pop quizi. Reformists – separation is anti-capitalists. SH dhould have more

disclosure rights and mgmt has more fiduciary duties ii. Contractarians – Seperation is efficient and SHs are willing to give up

control. SHs are protected by control MKTs and the law should protect the ability of MKTs to takeover the corp if it is being inefficiently run

iii. Political realists – law has fostered this separation. Other countries don’t have this same separation. SHs is disempowered by politics that fear concentration of money

iv. Team theorists – law accepts separation. SHs let corporate BOD mediate capital, mgmt, labor disputes. This sees the group as a team.


v. Contractarians 2 – contractual relationship, but unlike Easterbrook thought. Separation empowers the BOD

h. Hypothetical answersi. Descriptive answers – What is the theory of the firm? Most went w/ the

Contractarian POVii. Normative answers – what should be the theory of the firm? More split: 3

took the reformist view; 3 took contractarian POV; 3 BOD as the mediator; 2 BOD as the master

iii. Mutual funds are not required to take a vote for defining when the fund is about to act/ invest – able to act w/o investor consent

i. SH voting in public corpsi. Apple commercial – how is this like SH voting?

1.The followers of Big Brother are completely passive and at the will of mgmt. This is like the SH in a major corp – it is rational for SH to act passively to take what the BOD gives them

2.The value of attempting to discover what the BOD is actually doing and becoming informed is high AND get other SHs to come along w/ is high AND if one SH has a high enough stake to force the issue, others will come along for a “free ride” w/o undertaking any cost

3.This is analogous to the prisoner’s dilemma – how does this fit to SH voting?

a. Assumption that the SHs would not take the time to undertake to inform themselves of appropriate information

b. If a sufficient number of SHs wont be informed enough to be fully informed on the vote, then it would be better to not be informed

4.When the number of shares one SH has increases significantly – they have an increased incentive to be informed about potential transactions

a. This further reduces the desire of small SHs to act b/c there is less of a chance for it to have an impact

j. Institutionalization – deretailizationi. There is an increasing trend of a reduced number of individual retail

investors in the MKT – means they have moved over to intermediaries. Institutional makes up roughly ~77% of the MKT.

1.Research shows that individual investors lose in the MKT, which is why the many have moved over to institutions

ii. Investment companies


1.Mutual funds – required diversification along an investment strategy. Makes up ~ 27% of MKT. Mgmt gets a % of assets

2.Hedge Funds – unregulated entities. Initially intended to act as a mathematical hedge, but now has become more active to find increased returns. ~3% of MKT

iii. Pension Funds – both private (9% of MKT) and Public (14% of MKT)1.Pension funds are GTD payouts to beneficiaries over a period of

time2.Private pension funds have dropped significantly

iv. Insurance companies – 8% of MKT to ensure payouts of claimsv. Endowment firms – 1.5%; intended to provide mney to organizations

vi. Foreign institutions - ~13% 1.Lots of incentive to invest in the US2.Credible evidence that the $s from other countries created mortgage

bubble – still may be occurringk. Legal Limits over SHs activism

i. Rosenfeld 1.Facts – insurgent group differs on policy questions; wants to go after

SHs; incumbents want to keep CEO. Insurgents win. Previous BOD spent $ on re-election and lost; Insurgents decided to give $ to incumbents; then SHs vote to cover insurgents expenses

2.Issue revolves the repayment of expenses3.Ct held

a. Incumbent directors must have the ability to use funds to protect incumbency WHEN there is a genuine policy question.

i. If not, then the corp would be at the mercy of the insurgents

ii. The SHs already voted for the incumbents – this means they have given authority to protect their policies

iii. w/o ability to protect themselves w/ corp funds, BOD might need more money in salary

b. SHs can vote to reimburse insurgents for their expenses4.This may actually limit SH activism – the only way SHs would want

to bring action is if they knew they would be able to “kill the king”a. If not, then they wouldn’t get their reimbursement

ii. Long Island Lighting (LILCO)1.Important in the area of corp democracy and the ability of SHs to

participate


2.Facts – SH is an insurgent is attempting to get private utility to become a public utility in order to drive the cost down of energy. BOD runs proxy campaign at corp expense to keep the company private. Citizen group that is NOT SH but is sympathetic to insurgent puts out newspaper ads alleging that the corp is mismanaged and the costs are too high – important to remove the corp BOD and make it public utility

a. Under SEC rules for proxy solicitation – as an insurgent, SH must (1) file proxy statement w/ the SEC, (2) get it approved by the SEC; and (3) then distribute it to ALL SHs.

b. Further, under SEC rules – the citizen group’s ads may also be considered a proxy solicitation.

i. Non-SHs exercising free speech could be seen as a proxy solicitation b/c the communication may reach SHs who have already received the proxy materials

ii. Anti-fraud review by a Ct may also apply to these cases – must be complete and honest

3.Issue – what is considered to be reasonably calculated to lead to a solicitation of SH vote

a. Ct held that it is possible for this to actually be considered proxy solicitation – remanded back to figure it out

4.Dissent – this is a fed gov't preventing speech and acting as a censor empowered to determine the truth/ falsity

iii. SH communications rules answered Winter’s dissent (Rule 14a-2(b))1.Solicitation and discussion between SHs via oral communication OR

by a SH who has less than 5% who sends information is exempt from proxy solicitation steps w/ the SEC

2.STILL SUBJECT TO ANTI-FRAUD PROVISIONS3.Rule 14a-3- Doesn’t apply to speeches in public forums or

broadcasted opinions PROVIDEDa. Not in the form of proxy, consent, or authorizationb. At the time communication is made definitive

4.SHs also have the right to express their decision regarding a vote that is not limited by solicitation rules OR anti-fraud provisions

5. SH proposalsa. 1942 – SH proposal rule is adopted by the SEC. Big event – there must be a

proper mechanism for ensuring proper SH proposals are submitted to SHs for a vote

b. 1992 – SH rules changed to make communication btwn SHs easier


c. SH proposal rulei. What is a proposal – any recommendation or requirement that the

company/ BOD take action which is intended to be presented at a SH meeting which is not excluded under 14A-8(i).

1.Can be recommendation OR a requirement – can only be a requirement when it is a proposal for a bylaw b/c the bylaws are binding on the BOD

2.Can make non-binding resolutions at any point ii. Who eligible – any SH w/ 1% (usually not the case) OR at least $2K

worth of shares in time of submission for at least 1 year. This is arbitrary by the SEC

1.Under St law – no limit to bring proposals BUT doesn’t get SEC proposal mechanism

2.Can show eligibility as beneficiary owneriii. How many proposals – no more than 1. Corps will likely exclude all

proposals more than 1 for re-submissioniv. How long can the proposal – can’t be longer 500 words including any

accoming supporting stmtv. Deadline – 120 days before the date of the last proxy statement in current

year (April 30 last year? Then 120 before April 30 this year)vi. Failed to follow eligibility requirements – corp may exclude proposal but

must give the SH the opportunity correct and SH has 14 days to fix and return to corp

vii. What if corp excluded proposal that is qualified – multiple reasons under 14a-8(i) (EX – improper under St law; not relevant b/cit is less than 5% of corp business; it is a BJR mgmt function)

1.The corp must go through a procedure w/ the SEC to tell the commission why the it excluded the proposal (and likely gives legal opinion)

2.SEC will return a explanation as to whether this is proper or notd. Lovenheim v. Iroqois Brands

i. Facts - ∏ owned 200 shares of stock in corp, concerned about the way the corp was raising geese. Motive is not an issue in the case. SH proposal wants to have the corp examine for investigation of treatment of the geese, which is OK to recommend the BOD investigate. Corp argues that this is an extremely small part of the business.

1.SEC states that it is OK to be on one topic even if it may have been 2 proposals


2.After corp submits to the SEC – SEC agrees w/ the corp. If SEC doesn’t agree w/ corp, it will most likely be put in the proxy materials

ii. ∏ argues there is an exception – this might be a tiny part of revenue, but it is otherwise significantly related to the company b/c revenue alone doesn’t define when the SH can bring the suit

iii. Ct holds - SEC in 1976 stated that SH proposals can be substantially related to the business and of interest to the SH even though there isn’t economic significance

1.This doesn’t affect Auer v. Dressel – Ct there doesn’t argue that SH proposal must be related to economic interest

2.DE law requires the proposal to be related to economic interest of the corp BUT doesn’t make it a significance requirement

e. History and use of § 14a-8i. Medical Committee (DC Cir 1972) – mtm can’t treat corp as personal

satrapies BUT include proposalii. SEC interpretative release 1976 –

iii. SEC no action letter (1976-1991) – requests for EEO reports may be includable BUT SEC changed course in 1991

iv. Reversal of Cracker Barrel (1998) – propersal that Cracker Barrel not discriminated against gay employees, and it won

f. Proposals excluded by mgmti. Proposals excluded by mgmt and sent to the SEC has changed over time

1.Governance proposals used to represent ~1/4 of proposals; NOW almost 50%

2.Social political proposals have diminished by roughly 10% 3.Operational proposals also fell

ii. SEC attitude on excluded proposals1.Governance proposals has shifted from being strongly excluded to be

included2.Social political has stayed moderately the same

iii. Is there a difference btwn social and economic proposals? There can be seen much more related than distinctions may attempt to lead people to believe

iv. Mutual funds are more active than average investors

Documents

users.wfu.eduusers.wfu.edu/palmitar/ICBCorporations-Companion... · Web view“Democracy is a cruelly misleading word to describe the situation of the American SH.” ... Vote on