Newsletters

Mergers

Disclosure and Shareholder Approval Requirements for Stock Options During Mergers

Corporation Governance: Meetings and Voting

Control of a corporation is exercised through its board of directors. Shareholders in turn elect the directors. In addition to straight voting of one vote per share, there are several methods provided by statute or corporate charter for calculating shareholder votes, including cumulative, class, weighted, and supermajority voting.

Basics of the Agency Relationship

Business often is conducted by agents who act for others. For example, insurance policies may be sold through agents. Agencies also exist in relationships between guardians and wards, employees and employers, estates and executors, and partners.

Initial Public Offerings and Lockup Agreements

A lockup agreement is a contract between an underwriter and a company going public in which the insiders of the company, including directors, officers, employees, and friends and family agree that they will not sell shares of the company they own until a set period of time after the company's shares are sold to the public. The objective of the lockup agreement is to provide a stable market for the securities for a reasonable time after the initial public offering.

Restrictions on Short Sales of Securities

A short sale of a security is a sale of the security by an investor before the investor actually owns the security being sold. The investor profits if the value of the security declines between the time of the sale and the time of delivery of the security. Short sales may also allow an investor to lock in changes in value shares already held or to hedge against significant changes in value in securities.