The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors.MegaCorp,which has cumulative voting,quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure.The shareholders vote to do away with cumulative voting.The outsider,Dawn,who wanted to get herself elected to MegaCorp's board,claims that the company has committed an illegal act.Is she right?
A) Yes.The United States Supreme Court has ruled that a publicly held corporation that purposefully sets about to eliminate cumulative voting to prevent a person from getting herself elected to the board has acted illegally.
B) Yes, but only if the company is incorporated in a state that has adopted the Model Act.
C) No, provided the company did not change its cumulative voting provision solely for the purpose of preventing a particular person from taking advantage of that right.
D) No. Under the Model Act, regardless of MegaCorp's motives, it had the right to act as it did.
Correct Answer:
Verified
Q29: MegaCorp occasionally sells products in Michigan.It does
Q30: Wizardry Corporation's purpose clause in its charter
Q31: What is an exculpatory clause?
A)A requirement that
Q32: Which of the following states that a
Q33: Fashions,Inc.has 12 shareholders.The company is subject to
Q33: Mike is planning on incorporating his business
Q36: Which of the following can challenge the
Q36: What are some of the advantages for
Q38: The executives of Jornaginn Corporation have decided
Q39: Preemptive rights are
A)not legal in the majority
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents