Exam 20: Directors, Officers, and Controlling Shareholders.

A __________ is an agreement in a proposed takeover that allows the board of directors to negotiate with other bidders or to terminate a merger agreement.

A controlling shareholder has a duty not to transfer the power of management to a purchaser that he knows or has reason to believe will use that power to the detriment of the corporation.

A shareholder who owns sufficient shares to outvote the other shareholders,or to otherwise set corporate policy,and thus to control the corporation is known as a(n)__________ shareholder.

In theCarmody v.Toll Bros.,Inc.case discussed in the text,the Delaware Court of Chancery analyzed the question of the legality of a dead-hand pill under Delaware law.In striking down the dead-hand pill,the court ruled that:

Traditionally,a transaction benefiting a director's self interest is __________ unless the director could show it was fair and reasonable to the corporation.

In a __________,someone wishing to replace the board with his or her own candidates attempts to acquire a sufficient number of shareholder votes to do so through limited written powers of attorney entitling the holder to vote the shares owned by the person giving the power of attorney.

The Delaware Corporation Code allows the certificate of incorporation to include a provision limiting or eliminating the personal liability of directors to the corporation or to its shareholders for monetary damages for breach of the duty of loyalty.

__________ is a purchase of a dissident shareholder's stock by the issuer at a premium over market,often in exchange for a standstill agreement,whereby the shareholder agrees not to commence a tender offer or proxy contest or to buy additional shares of the issuer for a period of time.

Which of the following are among the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act in relation to shareholder control of pay for top executives?

Yolanda,a ballroom dance instructor,was recently asked to be a director of ABC Company which is publicly traded.She is very honored and excited.Her friend,Joe,asked her if she had any experience in accounting,business,or SEC requirements.Yolanda told him no,but that the president of ABC had assured her that the only responsibility of a director was acting as a figurehead because the officers took care of all detailed corporate business.Yolanda says that she is accepting the position because it will get her exposure in the community and perhaps increase her dance clientele.Is Yolanda correct regarding her responsibilities,and why or why not?

In the context of executive compensation,__________ stock usually means stock subject to vesting restrictions.

Which of the following was the result in the Quickturn Design Sys.,Inc.v.Shapiro case,which involved a Delaware court's ruling on the "no-hand pill"?

In CASE 20.4In re Abbott Laboratories Derivative Shareholders Litigation(2003),the shareholder-plaintiffs alleged the corporate directors breached their duty of good faith through their failure to follow up on repeated notices of regulatory noncompliance.How did the court rule?

Which of the following is considered an inside director of a corporation?

Some jurisdictions permit the shareholders to amend the articles of incorporation to relieve directors of any financial liability for violations of the duty of:

In the Air Products & Chemicals,Inc.v.Airgas,Inc.case discussed in the text,defendant's boardof directors allegedly breached its fiduciary duties to stockholders by refusing to redeem a poison pill in place and allow a hostile takeover to proceed.The court ruled that:

What was the conclusion of the court in Unocal Corporation v.Mesa Petroleum Co.regarding the application of the business judgment rule to actions of directors in response to a takeover attempt?

Define and explain the purpose of the business judgment rule.Under what circumstances would the rule apply? When would the protection not apply? Discuss fully.

Which of the following is true in regard to the business judgment rule if one or more individual directors have a personal interest in a transaction being considered by the board?

A shareholder derivative action is a suit brought by a shareholder on behalf of the corporation.