Company: ZNOG
Filing Date: 2025-03-28
Form Type: PRE 14A
Source: 0001437749-25-009798
Chunk: 75

Company: ZION OIL & GAS INC
Filing Date: 2025-03-28
Form: PRE 14A
Chunk 75
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, indemnification, advancement, the business judgment rule, and the entire fairness standard of judicial review. In addition, the Board considered that Delaware law has addressed a number of issues impacting public companies that Texas law has not (yet), including Caremark oversight claims, public company conflicted controller transactions, and intermediate scrutiny of defensive tactics. However, Texas’s silence in these areas does not mean that Texas law is or will be meaningfully different from Delaware law. Texas courts often look to Delaware law to fill gaps in Texas law, and the Board concluded that there was no reason to believe that Texas law would provide substantially lesser litigation rights than Delaware in areas where it is currently silent. The Board identified two important areas with differences between Texas and Delaware stockholder litigation: procedural approaches to stockholder derivative claims and the fact that Texas recently began a specialized business court system. The Board concluded that these differences were procedural. In addition to its own analysis with its advisors, the Special Committee took note of commentary comparing Delaware and Texas law, including of ISS’s prior statement that “reincorporation from Delaware to Texas would appear to have a neutral impact on shareholders’ rights,” and Glass Lewis’ prior statement that “in most respects, the corporate statutes in Delaware and Texas are comparable.” Both have previously recommended voting in favor of multiple Delaware-to-Texas reincorporations.

There is Value in Local Decision-Making. Another advantage of home-state incorporation is that the legislators and judges making corporate law and the juries deciding fact disputes in corporate cases are drawn from the community in which the company operates. Corporate law and litigation often overlap with and impact business, employment, and operational matters. The Board believes that local decision-makers have a deeper understanding of our oil and gas business and therefore are best situated to make decisions about our corporate governance. The Board considered the likely relative predictability of Delaware and Texas law based on differences in their judicial systems. Delaware has the most respected corporate judicial system in the country and has an extensive body of corporate case law. In contrast, Texas has a new business court system and has a smaller body of corporate case law. This factor did not alter the balance in the Board’s evaluation of Delaware and Texas. In making this determination, the Board was persuaded by the broadly held academic view echoed by at least three former Delaware Supreme Court Justices and one former Chancellor on the Delaware Court of Chancery that Delaware law can be indeterminate because of its use of broad, flexible standards that are applied to individual cases in a highly fact-specific way. Although Texas has less