CORPORATE ACTS

(Voting Requirement to be Valid)

Corporate Act Votes of the Votes of the Salient Points

Board SH's/members
Amendment of Majority 2/3 of the - the SH vote may be done by written assent (if
the Articles (Sec. OCS / members so, no meetings is required)
16, Corp Code) -there is an appraisal right for dissenting SH's
-effective upon approval by the SEC; or from 6
months from filing if the SEC does

Elections of n/a Candidates with - owners of the majority of the OCS must be
Directors/Trustees the highest number present either in person or by written proxy
(Sec. 24) are elected - done by ballot, if requested
-cumulative or straight voting is allowed
- formula:

[AB/(C+1)] + 1 = number of shares required to

vote for the desire number of directors:

A = outstanding shares
B = desire # of dir.
C = total number of dir.

- no delinquent stock shall be voted

- if non-stock, only 1 vote per candidate
- meeting may adjourn from time to time, but not
sine die or indefinitely
Electing corporate Majority of n/a - this is an exception to the rule that a vote of the
officers (Sec. 25) all the majority of a majority of the board (which is a
members of quorum) validates corporate acts
the board - done immediately after the directors are elected
Removal of n/a 2/3 of OCS/ - either at a regular or special meeting w/ notice
directors / trustees members to the effect that removal will be contemplated
(Sec. 28) - called by the secretary upon the instance of the
president, or on written demand of SH's holding
a majority of the OCS
- if the secretary fails or refuses, or there is no
secretary, it may be called by any SH
- removal may be with or without cause
Filing of vacancy Majority of Majority vote of -vacancy other than by removal or by expiration
in board / remaining the SH's (but only of term
trusteeship (Sec. directors / if there is no - if the position needs to be filled by reason of an
29) trustees if quorum for increase, the vote can only be done in a meeting
still directors) (either called for that purpose of in same meeting
constituting a where the increase was approved)
quorum
Ratification of n/a 2/3 of OCS/ - the presence of the director at the meeting in
director's members which the contract was approved must have been
contracts with the necessary to constitute a quorum; and his vote
corporation (Sec. must have been necessary to approve the contract
32) -needs full disclosure of the adverse interest
- the contract has to be fair and reasonable under
the circumstances
Ratification of a n/a 2/3 of the OCS/ - occurs when a director obtains for himself a
disloyal director's members business opportunity which should belong to the
acts (Sec. 34) corp and obtains profits thereby
- if no ratification, the director has to refund all
the profits
Extending of a Majority 2/3 of OCS/ - appraisal right allowed in case of extension
disloyal director's members - written notice needed
acts (sec. 37)
Increase/ decrease Majority 2/3 of the OCS/ - meeting duly called for the purpose
capital stock members - written notice needed
Incur/ increase - certificate showing the details of the transaction
bonded - effective upon SEC approval
indebtedness - treasurer's certificate needed (25% + 25% of
(Sec. 38) the increase)
Denial of n/a 2/3 of OCS - the vote is needed to deny a preemptive right
preemptive (SEC. when the shares to be issued are in exchange for
39) property needed for corp purposes or in payment
of a previously contracted debt, and if issued in
good faith
Sale /disposition Majority 2/3 of -meeting called for that purpose
of all or OCS/members - written notice
substantially all of - if non-stock and - after approval, the transaction may be
assets (Sec. 40) members don't abandoned w/o need of a SH/ member vote
have voting rights, - appraisal right exists
a vote of the - substantially all = corp is rendered incapable of
majority of the continuing the business of accomplishing its
trustee is enough purpose
- n/a if necessary in usual and regular course of
business, or if the proceeds are appropriated to
conduct the remaining business
Investing funds in Majority 2/3 of OCS/ - meeting called for the purpose
another members – not - written notice
corp/business or needed if the - appraisal right
for any purpose investment is
other than the reasonably
primary purpose necessary to
(Sec. 42) accomplish its
primary purpose
Power to declare n/a 2/3 of OCS - regular or special meeting
stock dividends - if SH is delinquent, the dividends are withheld
(Sec. 43) until the subscription is fully paid
Entering into Majority of Majority of the - applies when a corp undertakes to manage /
management the majority SH's/ members of operate all or substantially all of the business of
contracts (Sec. (i.e. the same both managing and another corp
44) as for other managed corp - only 5 years per term
normal acts
of the board) - 2/3 of OCS/
members needed
if:
a) if a SH
representing
interests in both
corps owns more
than 1/3 of the
OCS of the
managing corp; or
b) a majority of the
members of board
of the managing
corp are also a
majority of the
members of the
board of the
managed corp
Adopting By- n/a Majority of SH's / - filed w/ in 1 year after notice of issuance of
Laws (Sec. 46) members certificate of incorporation (signed by SH's
voting for them)
- can also be filed before incorporation (signed
by all incorporators) and submitted w/ the
Articles
- effective only upon issuance of a certificate by
the SEC the the BL's are not inconsistent with
the Corp Code
Amending the Majority Majority of OCS/ - regular or special meeting
By-Laws (Sec. members
48)
Delegating power n/a 2/3 of OCS/ - effective only upon a certification by the SEC
to amend/ repeal members that the amendments are not inconsistent w/ the
or adopt new By- - revoked by a Corp Code
Laws (Sec. 48) majority vote of
OCS/ members
Fixing issued Normal board Majority of OCS - meeting called for the purpose
price of no par- action (if (if not allowed to
value shares allowed by be done by the
(S.62) Articles of Board)
BL's)
Merger / Majority of 2 /3 of OCS/ - separate meetings for both sets of SH's, duly
consolidation both boards members of both called for the purpose
(Sec. 77) corps - notice given at least 2 weeks prior to date of
meeting
- appraisal right allowed (except if plan
abandoned after SH approval)
- same voting requirements if an amendment is
to be made to the plan of merger/consolidation
- articles of merger to be executed by each corp
- merger/consolidation approved upon issuance
of certificate by SEC that it's not inconsistent
with the law
- if it is found to be so inconsistent, the SEC
shall conduct a hearing to allow the corp's to be
heard
Fixing of n/a Majority of OCS - regular or special meeting
compensation of - total yearly compensation not to exceed 10 %
directors (other of net income, before income tax, of the corp
than per diems) during the preceding year
(Sec. 30) - may also be provided for in the BL's
Plan for Majority of 2/3 of members - regular or special meeting
distribution of trustees having voting - written notice
assets in non- rights - members can vote by proxy
stock corps (Sec. - adopted when non-stock corp in the process of
95) dissolution