F. SHAREHOLDERS

Question 1

Who can vote during shareholder meetings?

Answer 1

Only registered shareholders on the record date are entitled to vote at the shareholders meeting.

Record date cannot be more than 70 days prior to the meeting.

Question 2

In terms of form, what is required in a proxy? What is the validity?

Answer 2

Must be signed on either an appointment form, or electronic transmission.

This is valid for 11 months.

Question 3

Are proxy agreements freely revocable by the shareholder?

Answer 3

Yes, even if the proxy states that it’s irrevocable.

The exception will be if the proxy states that it is not only irrevocable, but also coupled with an interest or legal right.

Question 4

Which shares are entitled to get one vote each?

Answer 4

Outstanding shares or those held by shareholders. Unless the articles of incorporation state otherwise.

Question 5

What is required for quorum?

Answer 5

Majority of the shares entitled to vote.

Question 6

Articles or bylaws may provide for cumulative voting to elect directors. What does this mean?

Answer 6

Each share is entitled to as many director spots as there are open
Example: 100 shares owned x 3 spots = 300 votes

Shareholder may cast all of his votes as he wishes.

Question 7

What must shareholder show to inspect and copy corporate accounting records and records of shareholders? Procedurally, what must shareholder do?

Answer 7

If requires all 5
1) made in good faith and for proper purpose;
2 described the purpose with particularity;
3) the requested records are directly connected with the purpose;
4) made during regular business hours at a reasonable location; AND
5) with 5-days written notice

Presumed proper purpose when there is credible basis to suspect that the company has engaged in wrongdoing, such as by breaching its fiduciary duty.

Question 8

What types of records can shareholders inspect without proper purpose?

Answer 8

Articles of incorporation
By laws
Board of Director resolutions on classifications of shares
Minutes of shareholder meetings for past 3 years
Name and business addresses of current directors and officers
Most recent annual report

Question 9

Meetings and otice

Answer 9

Annual Meetings, Special Meetings, & Notice

Annual Meetings – Corp. MUST hold an annual
meeting of the SH’s at a date/time stated in the bylaws.
− Directors are usually elected at the annual
meeting.

Special Meetings – May be called by:
a) The BoD;
b) Persons authorized under the Articles of
Incorporation; OR
c) SH’s holding at least 10% of all votes entitled to
be cast at the meeting.

Notice – Must be given to all SH’s entitled to vote AND
requires:
1) At least 10 days advance notice of the meeting
(but not more than 60 days);
2) The meeting’s date, time, and place; AND
3) A description of the meeting’s purpose (for
special meetings only).
*If the meeting involves a fundamental change, ALL
shareholders (whether or not entitled to vote) are entitled
to notice.

Waiver of Notice – a SH may waive notice:
a) in a signed writing; OR
b) by attending the meeting and not objecting at
the beginning of it (or not objecting to a matter
not described in the notice).