3pg business law paper

ST. FRANCIS COLLEGE

Department of Accounting and Business Law

BUSINESS 2102–03 Business Law II Spring 2019 Prof. Miriam Salholz

Corporate Governance: Examining the Role of Shareholders, Directors and Officers

ABC Corp. is a publicly-held corporation incorporated in the state of Delaware and

headquartered in Ohio. It manufactures state-of-the-art widgets. ABC does business throughout

the United States, where it holds 15% of the national market in these widgets.

ABC is considering making several changes, some major, some minor. According to the rules of

corporate governance, certain changes may be made by officers acting on their own; others

require input of the Board of Directors, while some changes require a shareholder vote.

Here is the list of issues faced by ABC:

1. The CEO’s workload has increased, and she wants to hire a second executive assistant.

2. Because she is working much harder, the CEO wants a 20% salary increase.

3. ABC has no manufacturing plant in Michigan, although it has facilities in other U.S. states, including Texas. The issue is whether to open a plant in Michigan.

4. ABC is also interested in expanding into international markets and is considering opening a plant in Mexico, across the border from its plant in Texas.

5. ABC currently manufactures its widgets in 10 colors. It would like to offer its widgets in two additional new colors.

6. In preparation for future expansion, ABC may need to 6.1 increase its authorized stock and 6.2 enlarge ABC’s existing purpose.

7. The success of ABC has attracted the attention of Micro Widgets Inc. (“MWI”), a larger corporation that manufactures widgets and related products. MWI wants to enter

into negotiations to buy out ABC.

7.1 Who decides to enter into negotiations with MWI? 7.2 Who does MWI negotiate with? 7.3 Who decides whether to sell to MWI?

8. ABC thinks that its future may lie in its own expansion, and is considering buying two smaller competitors.

8.1 Who makes this decision to purchase? 8.2 Are any government filings required?

Questions 1-6 are mandatory. Questions 7-8 on corporate acquisitions are optional, for

bonus points. If you answer Questions 7-8, read Chapter 38, p 637 (Introduction to

Corporate Acquisitions) and p 641 (Required Approvals for a Merger as background).

2

Assignment: write an individual paper with the following content and style requirements:

Paper content There are two parts (A and B):

A. Discuss the decision-making and preparation processes of each group - officers, directors, and shareholders. At a minimum, cover shareholders’ meetings and directors’

meetings: frequency, notice, proxies, quorum, voting, proxy statements, shareholder

proposals, Board committees. Discuss officers’ authority and right to delegate. These are

only examples, there is much more.

B. Discuss which group(s) - officers alone, officers and directors, or officers, directors and shareholders – should, under the rules of corporate governance, address/handle/decide

each issue, 1-6 (or 1-8), in the fact pattern on page 1. Give reasons for your decisions.

Do not take/write about your position on the issues, e.g. whether or not to hire an

assistant or approve a raise.

Paper Style

1. Put your name on the first page (top left). Do not repeat on content pages of your paper.

2. NUMBER YOUR PAGES. You will lose points if you do not.

3. Minimum of three (3) pages of text for questions 1-6. Minimum of four (4) pages if you

also answer questions 7-8. Maximum of five (5) pages.

4. Use 12-point Times New Roman font.

5. Use one-inch margins all around.

6. Double space the lines. Do not put extra spacing between paragraphs (including after

your name).

7. Do not use up space by repeating the assignment text. Refer to issues by number (1-8).

Due date: upload your paper to the Canvas drop box by 11:59 pm on Saturday, April 6th.

Late papers will not be accepted, as one of the purposes of this paper is to help you prepare for

Test 2, which is on April 9th.

Be sure to follow each of the content and style requirements for your paper. You will lose one

level of grade (i.e., B to C) if you do not.

This paper is worth 20% of your final grade.

Good luck and enjoy.