Corporations: Board Actions (I) (Hold Annual Meeting (Exception (Unanimous…
Corporations: Board Actions (I)
Hold Annual Meeting
The corporation must hold an annual meeting, so the shareholders have the opportunity to gather and discuss proposed changes to the bylaws.
Hoschett v. TSI Internat’l Software
The Board can substitute written consent for an annual meeting.
DGCL § 211(b)
Written consent may only substitute an annual meeting, if all the director seats are "vacant" then filled by this action.
Director leaves before the reelection occurs at the annual meeting.
The corporation’s directors may not oust a controlling shareholder from the Board without giving advanced notice.
Controlling shareholder has the right to remove at least one director to prevent her ouster and stock dilution, b/c she contracted with the corporation to buy stock.
Adlerstein v. Wertheimer
If the Board fails to give advanced notice, then they breach their fiduciary duties to the controlling shareholder.
The corporations directors have wide discretion to determine whether to pay dividends to common stockholders.
It may be unreasonable for a corporation to deny dividends, based on custom and surplus capital. However, if the shareholders benefited from the transaction, then courts will usually defer.
Dodge v. Ford Motor Co.