Chapter 11

Question 1

Shareholder

Answer 1

Owner of a corp, stockholder

Question 2

Institutional investor

Answer 2

Large org like pension plan or mutual fund that invests on behalf of members

Question 3

Retail investor

Answer 3

Individual shareholder

Question 4

Straight vote

Answer 4

Each share of record equals one vote (statutory vote) (each director stands for election one at a time)

Question 5

Cumulative voting

Answer 5

Each share Carrie’s as many votes as there are directors being elected (ONLY in director voting)(all directors stand for election at the same time)

Question 6

Class voting

Answer 6

Voting by a class of stock as a separate unit

Question 8

Contingent voting

Answer 8

Voting rights that exist only upon the occurrence of some event

Question 9

Disproportionate voting

Answer 9

Voting rights held by a class that is disproportionate

Question 10

Nonvoting stock

Answer 10

Stock that has no voting rights

Question 11

Annual v special meeting

Answer 11

Bylaws

Question 12

Record date

Answer 12

Date selected ahead of a meeting or vote (to see who holds stock at that time)

Question 13

Record holder

Answer 13

Owner of stock at the record date

Question 14

Annual report

Answer 14

Report describing corporate performance

Question 15

Quorum

Answer 15

Minimum shareholders or directors required to be present for action/vote to be taken

Question 16

Proxy, proxy holder, limited proxy, general proxy

Answer 16

Written authorization from one directing another to vote his shares

Question 17

Proxy fight/contest

Answer 17

Fight for control of a company

Question 18

Management proposals and shareholder proposals

Answer 18

2 types made at a shareholders meeting

Question 19

Proxy access

Answer 19

Ability of shareholder to include his desired nominees for director positions in the company’s proxy materials

Question 20

Plurality

Answer 20

Doesn’t have majority but has more votes than any other opponent or issue

Question 21

Pooling agreement

Answer 21

Agreement among shareholders specifying how they will vote

Question 22

Voting trust

Answer 22

Shareholders agree and transfer voting rights to a trustee to vote for then

Question 23

Voting trust certificate

Answer 23

Doc showing ownership in a corp, which evidences that the shares are subject to a voting trust

Question 24

Legend

Answer 24

Notation marked on a stock certificate indicating the stock is subject to some restriction

Question 25

Minutes

Answer 25

Written record of events during a meeting

Question 26

Written consent

Answer 26

Action taken without the necessity of a meeting; must be unanimous

Question 27

Dividends

Answer 27

Directors usually under no obligation to pay dividends to common shareholders. Discretion of board from time to time. If preferred shareholders have cumulative dividends, those are paid first for current and previous years before they can be distributed to other shareholders.

Question 28

Buy sell agreement

Answer 28

Restriction on selling and buying stock, usually to keep it among a few

Question 29

Direct v derivative action v class action

Answer 29

.

Question 30

Strike suit

Answer 30

Lawsuit filed by disgruntled shareholders after a stock drop

Question 31

Piercing the veil

Answer 31

Holding individual shareholders liable for corporate obligations

Question 32

Alter ego/ commingling of funds

Answer 32

Ways to pierce the veil

Question 33

Inside v outside/independent director

Answer 33

.

Question 34

Director cannot delegate

Answer 34

Authorizing dividends, filling vacancies on the board, amending bylaws

Question 35

Staggered system

Answer 35

Like senate

Question 36

Business judgment rule

Answer 36

Rule immunizing directors and officers for action taken so long as they acted in good faith

Question 37

Entire fairness standard

Answer 37

Requirement that transactions be objectively fair to shareholders when directors lack independence or controlling shareholder is involved

Question 38

D & O insurance

Answer 38

.313

Question 40

Indemnify

Answer 40

Reimbursing another for injury sustained by the other (directors or officers)

Question 41

Governance guidelines

Answer 41

Formal written policies relating to management of corporations

Question 42

ESG proposals

Answer 42

316

Question 43

Plurality plus voting

Answer 43

A system in which a director must offer to resign if he or she does not receive majority support; board can accept or reject resignation

Question 44

Majority voting

Answer 44

Candidate must receive more votes for than against 320

Question 45

Consequential majority voting

Answer 45

A method of voting in which an uncontested nominee must receive more for than against and must irrevocably resign if he does not

Question 46

Emerging growth company

Answer 46

A company with annual revenue of less than 1 billion that is relieved from various SEC reporting and disclosure requirements

Question 47

Bring down certificate

Answer 47

Certificate of corporate officer verifying continuing accuracy of facts or docs

Question 48

Actual authority

Answer 48

Express authority or direction given by one to another

Question 49

Apparent authority

Answer 49

Authority one believes another to possess due to conduct or position

Question 50

Inherent authority

Answer 50

Authority that naturally flows from one’s position

Question 51

Officers

Answer 51

Agents