BizOrgSpr11 BRAR 1. Corporations a. Transfer of control i. Control block at premium ok ii.

Sale of seats ~ok, immediate transfer of seats ok (formality) iii. Tag along rights (in SH agreement): min SHs can join if maj SHs selling (rofr) b. Fundamental corporate changes i. Mergers and 1. Regular: a + b = A, SH of b get shares of A 2. Cash-out: a + b = A, SH of b get $ 3. Freeze-out: Cash-out where a is maj. SH of b ($ remedy) a. EFT (dealing and price) presumed when approved by: i. Maj of min SHs or by ID BMs. ii. Dissolution, SOSAA, SAA (importance and effect) 1. Procedure: Board app/rec->maj SH (or voting SH) app-, if b = 20%, a & b vote, if a has 90% of b, no vote for b-, SH Appraisal (~dis, ~SOSAA[DE]). c. Takeovers 1. Tender offers: public invitation to buy, hostile to board (Conditional, Two-Tier[coercive]) ii. Defensive measures 1. Board may do so if there is: RG to believe DCPE exists because of anothers stock ownership: if reasonable response to threat then BJR 2. Must cease if sale inevitable (rather max $ for SHs) 2. Shareholders a. Shareholder derivative suits (claim/harm belongs to corp, ~direct) i. Req: shares, bond, demand (Y,BJR) OR excuse demand [RD maj board ~disint/ID ($/soc)] ii. SLCs: of disint/ID BMs or + more, if ID then BJR, formed at (refuse) or after (R12b) demand. b. Shareholder Agreements i. Any: how to vote (dirs, FCCs, cuml. Voting), unanimous not req. ii. CHC: decide director duties (~div) if unanimous (min: no objection = agree). 3. Identifying Misconduct a. Shareholder duties in CHC i. Good faith: frozen out of $ benefit (cant sell shares, opp. conduct ~reas. exp.), bus.reason, equal ii. Statutory dissl: maj of SHs act(unfair,illegal,opp, fraud, waste,deadlock*dir/sh+), buyout or dissl. b. Fiduciary duties (to corporation, SHs derivatively) i. Care: RPBM, BJR if ~fraud, illegality, or COI, GN: uninformed decision(can rely) ii. Loyalty: corp first, self dealing (interest 2 sides, cured: maj.disin SH/dir(~GN)/fair), opp of corp (&capable,LOB,exp. Int.,COI; Safe Harbor*considered/rejected:ID BMs), non-compete. c. Insider trading i. 10B5: Any: Tippee(insider[O/D:NP nfo], breach, gain), Tippor (scienter), MA(3p,gov), (ind*reliance:dir,indir] or gov), duty 2 disclose Mnfo(reas. inv.) or ~trade. ii. 16B: Pub: buy<->sell, 2 trans w/i 6mos, O/D@trans1, 10% SH<trans1,2, ~scienter, +$->corp. d. Indemnification i. Corp or ~Corp v. Dir: must if dir successful on merits or otherwise (SOL, dismiss, etc.) ii. Corp v. Dir: may not if dir breached fid. Duty (dir/dirs ins. pays), if settle(costs only, ~settle $) iii. ~Corp v. Dir: can if dir acted in good faith reas. bel. Corps best int., commit to by AOI.