Exam 20: Directors, Officers, and Controlling Shareholders

A ________ occurs when minority shareholders are forced to convert their shares into cash,for example,when a subsidiary merges with its parent.

Fact Pattern 20-1 Tonya is the president of Big Corporation. Big Corporation is looking for land on which to build a new facility. Tonya locates suitable land, but purchases it for herself with plans to sell it at a profit at a later date. Rick, the majority shareholder of Big Corporation hears about Tonya's purchase and complains to her about it. She tells Rick that she viewed and purchased the land on her own time and that she did not breach any duties owed to the corporation. Rick tells her that she should reconsider and that he plans to discuss the matter with the rest of the board. -Refer to fact pattern 20-1. Which of the following is a widely used test for determining whether an opportunity belongs to a corporation?

The Dodd-Frank Wall Street Reform and Consumer Protection Act outlaws corporate executives from holding stock in companies for which they work.

In the context of takeovers,board members cannot reject an offer without taking sufficient time to analyze its merit.

Which of the following was the result on appeal in the case in the text Air Products & Chemicals,Inc.v.Airgas,Inc.,involving whether the defendant's board of directors breached its fiduciary duties to stockholders by refusing to redeem a poison pill in place and allow a hostile takeover to proceed?

In order to take advantage of the business judgment rule,directors must have made an informed decision and have no conflict of the interest with the corporation.

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?

The duty of ________ requires officers to exercise reasonable supervision over the business affairs of the corporation.

__________ 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 is true regarding statements of officers?

Which of the following was the result on appeal in In re Abbott Laboratories Derivative Shareholders Litigation,the case in the text alleging corporate directors' breach of the duty of good faith through their failure to follow up on repeated notices of regulatory noncompliance?

What was the result in Smith v.Van Gorkom,the case in the text in which it was alleged that directors were grossly negligent in failing to inform themselves adequately before making a decision about a merger?

Maurice is a fairly new director at ABC Corp. Peg,another director,tells him that she believes that the company is in Revlon mode and that the directors should act accordingly. What is Peg referencing?

A[n] _______ gives the person to whom it is granted the right to buy a certain number of shares at a fixed price for a fixed number of years during a period known as the ______ period which is not usually for more than _______.

In evaluating a buyout proposal,the directors should consider material nonprice provisions of the proposed agreement.

A contractual provision insisted upon by a bidder limiting the ability of board members to negotiate with other bidders is referred to as a[n] _______ clause.

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

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

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

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.