Source: http://www.pli.edu/Content/Treatise/Directors_and_Officers_Liability/_/N-4lZ1z13i5o?ID=25554
Timestamp: 2013-05-24 05:56:52
Document Index: 54304918

Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 5', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 7', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8']

PLI: Treatises - Directors' and Officers' Liability
Directors' and Officers' Liability (2nd Edition)
by Larry D. Soderquist, James A. Fanto, Pat K Chew
ISBN Number: 1402406568
§ 1:2 : Background and Trends1-4
§ 1:2.1 : History1-4
§ 1:2.2 : The Dominance of Agency Theory1-5
§ 1:2.3 : Trends and Events1-6
§ 1:2.4 : The Financial Crisis and the Legislative Response1-10
§ 1:3 : Sources of Legal Obligations and Liabilities1-11
§ 1:3.1 : Corporate Law1-12
[A] : Applicable Law1-12
[B] : Corporate Charter, Bylaws, and Corporate Contracts1-13
[C] : Delaware Corporate Law1-14
[D] : Model Corporate Codes1-15
§ 1:3.2 : Securities Laws1-15
[A] : Generalities1-15
[B] : Listing Requirements1-17
§ 1:3.3 : Civil Versus Criminal Law1-17
§ 1:4 : Non-Legal Expectations1-18
§ 1:4.1 : Recommended Practices and Codes1-18
§ 1:4.2 : Institutional Investors’ Expectations and Pressures1-19
§ 1:5 : Defenses and Protections1-21
§ 1:5.1 : Legal Defenses1-21
§ 1:5.2 : Contractual1-21
§ 1:6 : Summary1-21
Basic Business Obligations and Duties of Directors and Officers
§ 2:2 : Basic Duties of Directors2-3
§ 2:2.1 : What Do Directors Do?2-3
[A] : Basic Obligations2-5
[A][1] : The Board’s Relationship with the CEO2-8
§ 2:2.2 : Board Structure2-9
[A] : Board Leadership2-9
[A][1] : The Lead Director2-11
[B] : Board Size2-13
[B][1] : Classified Boards2-14
[C] : Board Meetings2-15
[C][1] : Shareholder Inspection of Board Minutes2-17
[D] : Service on Multiple Boards2-25
[E] : Board Election2-27
[F] : Removal or Resignation of a Director2-31
§ 2:2.3 : Duties of Directors2-36
[A] : Duty of Care2-36
[A][1] : Definition2-36
[A][2] : Elements2-37
[A][2][a] : Knowledge2-37
[A][2][b] : Commitment2-38
[A][2][c] : Adequate Information; Reliance on Others2-39
[A][2][d] : Duty to Inquire2-40
[A][3] : Business Judgment Rule2-43
[A][3][a] : General Standard and Application2-43
[A][3][b] : Rationale2-44
[A][3][c] : Prerequisites2-45
[A][4] : Standard of Conduct2-47
[A][5] : Legislative Limitations on Directors’ Liability2-48
[A][6] : Summary2-51
[B] : Duty of Good Faith2-52
[C] : Duty to Obey the Law2-58
[D] : Duty of Disclosure2-59
[E] : Duty of Confidentiality2-60
[F] : Liability for Corporate Acts2-62
§ 2:3 : Basic Duties of Officers2-62
§ 2:3.1 : Who Are the Officers?2-62
§ 2:3.2 : What Do Officers Do?2-63
§ 2:3.3 : Duties of Officers2-66
§ 2:4 : Summary2-69
§ 3:1 : Overview3-3
§ 3:2 : Delegation to and Reliance on Board Committees3-4
§ 3:2.1 : Delegation3-4
§ 3:2.2 : Reliance3-6
§ 3:3 : Board Committees3-7
§ 3:3.1 : The Independent Director3-7
[A] : Definition and Practice3-7
[B] : Legal Requirements3-9
[B][1] : Corporate Law3-9
[B][2] : Stock Exchange Rules3-9
[B][3] : SEC Disclosure3-13
[C] : Criticism3-13
§ 3:3.2 : Audit Committee3-14
[A] : Origin and Development3-14
[B] : Justification3-15
[C] : Membership and Qualifications3-17
[C][1] : Independence and Financial Literacy3-17
[C][2] : The Financial Expert3-19
[C][3] : Size and Structure3-21
[D] : Duties3-22
[D][1] : General; The Charter3-22
[D][2] : Auditing3-27
[D][2][a] : External Auditing3-27
[D][2][b] : Internal Auditing3-28
[D][3] : Complaint Procedures and Investigations3-30
[D][4] : Risk Management3-30
[D][5] : Compliance3-34
[E] : Related Obligations of Officers and Directors3-35
[E][1] : Officer Certification3-35
[E][1][a] : Content of the Certification3-38
[E][1][b] : Form of Certification3-48
[E][1][c] : Penalties for Improper Certification3-49
[E][2] : Improper Influence on Audits3-51
[E][3] : Prohibition on Retaliation Against Whistleblowers3-52
[E][3][a] : Dodd-Frank Whistleblower Provisions and SEC Implementing Rules3-58
§ 3:3.3 : Nominating/Corporate Governance Committee3-70
[A] : Justification and Background3-70
[B] : Composition and Charter3-71
[C] : Duties3-72
[C][1] : Nominating Responsibilities3-72
[C][1][a] : Board Membership Policies3-72
[C][1][b] : Recruiting and Nominating Directors3-73
[C][1][c] : Assigning Directors to Committees3-89
[C][1][d] : Planning for Management Succession3-90
[C][2] : Corporate Governance Responsibilities3-91
[C][2][a] : Corporate Governance Guidelines3-91
[C][2][b] : Management and Board Evaluation3-92
[C][2][c] : Director Compensation3-93
[C][2][d] : Review and Revision of Board Policies3-94
[C][2][e] : Director Orientation and Education3-95
[C][2][f] : Shareholder Communication3-95
§ 3:3.4 : Compensation Committee3-105
[A] : Justification and Background3-105
[B] : Composition and Charter3-107
[B][1] : Relationship with Compensation Consultants3-113
[B][2] : Risk-Based Compensation3-115
[C] : Duties3-120
[C][1] : Determining CEO Compensation3-120
[C][1][a] : Option Backdating and Other Manipulation3-122
[C][2] : Other Compensation Policies3-137
[C][3] : Shareholder Disclosure3-137
[C][4] : Special Compensation Arrangements3-138
[D] : Related Executive Compensation Issues3-139
[D][1] : Clawbacks3-139
[D][2] : Freeze on Extraordinary Payments3-142
§ 3:3.5 : Legal Compliance/Ethics Committee3-144
[A] : Justification and Background3-144
[B] : Generalities3-145
[C] : Duties3-146
[C][1] : Legal Compliance3-146
[C][1][a] : Supervision of Compliance3-146
[C][1][b] : Attorney Reporting/Qualified Legal Compliance Committee3-147
[C][1][c] : Internal Investigations3-149
[C][2] : Ethics3-150
[D] : Related Restrictions on Executives3-154
§ 3:3.6 : Disclosure Committee3-154
[A] : Background3-154
[B] : Disclosure Controls3-155
[C] : Disclosure Committee3-156
[D] : Special Disclosure Issues3-157
[D][1] : Off-Balance Sheet Disclosure in Management’s Discussion and Analysis3-157
[D][2] : Reconciliation of Non-GAAP or Pro Forma Financial Measures3-160
[D][3] : Real-Time Disclosures3-162
[D][4] : Mandatory SEC Review of Disclosure3-163
§ 3:4 : Summary3-164
Duty of Loyalty of Directors and Officers
§ 4:2 : Duty of Loyalty4-3
§ 4:2.1 : Definition4-3
§ 4:2.2 : When the Duty Arises4-3
§ 4:2.3 : Rationale4-4
§ 4:2.4 : Legal Sources4-5
§ 4:2.5 : Relationship with the Duty of Care4-5
§ 4:3 : Conflicts of Interest4-6
§ 4:3.1 : Definitions and Generalities4-6
§ 4:3.2 : Safe Harbor Statutes4-8
[A] : Scope4-8
[B] : Statutory Procedures4-9
[C] : Statutory Effect4-12
§ 4:3.3 : The Special Case of Officer and Director Loans4-13
§ 4:3.4 : Remedies4-15
§ 4:3.5 : SEC Conflict Disclosure4-15
§ 4:3.6 : Executive Compensation4-17
[A] : Corporate Law4-17
[B] : Federal Securities Law4-24
[B][1] : “Say on Pay”4-33
[B][2] : Effect of the Financial Crisis upon Executive Compensation4-39
§ 4:4 : Competition with the Corporation4-42
§ 4:4.1 : Use of Corporate Property, Information and Position4-42
[A] : Transactions with Investment Bankers4-45
§ 4:4.2 : Corporate Opportunity4-47
[A] : Definition4-47
[B] : Rationale4-48
[C] : Standards4-48
[D] : Officer and Director Liabilities4-50
[E] : Corporation’s Rules4-51
§ 4:4.3 : Competition4-51
§ 4:5 : Common Officers and Directors4-52
§ 4:6 : Officers and Directors of a Controlling Shareholder4-53
§ 4:6.1 : Generalities4-53
[A] : Tender Offer Freezeouts4-60
§ 4:6.2 : Securities Laws and Stock Exchange Rules4-64
§ 4:7 : Summary4-65
Special Obligations of Directors and Officers
§ 5:2 : Sale of Control5-2
§ 5:3 : Approving and Recommending a Merger or Acquisition5-4
§ 5:3.1 : Corporate Law Requirements5-4
§ 5:3.2 : Federal Securities Law Requirements5-7
§ 5:3.3 : Fairness Opinions5-8
§ 5:4 : Decision-Making in a Contested Merger or Acquisition5-11
§ 5:4.1 : Background5-11
§ 5:4.2 : Corporate Law Jurisprudence5-12
[A] : Standard Governing Defensive Measures5-12
[A][1] : Pre-Existing Defenses5-14
[B] : Defensive Efforts to Thwart Proxy Contests5-22
[C] : From Defenders to Auctioneers5-25
§ 5:4.3 : State Anti-Takeover Statutes5-34
§ 5:4.4 : Director Duties Under Federal Law5-35
§ 5:4.5 : Restrictions on Officers5-36
[A] : Management Buyouts5-38
§ 5:5 : Returning Profits to Shareholders: Dividends and Repurchases5-47
§ 5:5.1 : Dividend Decision5-47
§ 5:5.2 : Repurchase Decision5-48
§ 5:5.3 : Statutory Restrictions5-49
§ 5:5.4 : Defensive Uses5-50
§ 5:5.5 : Director Liability for Improper Dividends and Repurchases5-51
§ 5:6 : Director Decisions Near Insolvency5-52
§ 5:7 : Director Decisions on Shareholder Derivative Lawsuits5-54
§ 5:7.1 : Shareholder Derivative Lawsuits5-54
§ 5:7.2 : Shareholder Demand Requirement5-60
§ 5:7.3 : Demand Futility5-62
§ 5:7.4 : Special Litigation Committee5-69
§ 5:7.5 : Personal Jurisdiction Over Nonresident Directors and Officers5-74
§ 5:8 : Summary5-75
Special Obligations of Directors and Officers Under the Federal Securities Laws
§ 6:2 : Disclosure Obligations6-3
§ 6:2.1 : Securities Offerings6-3
[A] : Public Offerings6-3
[A][1] : Generalities6-3
[A][1][a] : Pricing of Offerings6-4
[A][2] : Management Disclosure6-5
[A][3] : Section 11 Antifraud Liability6-7
[A][3][a] : Damages6-8
[A][3][b] : Whistleblowing Defense6-9
[A][3][c] : Due Diligence Defense6-9
[A][3][c][i] : Generalities6-9
[A][3][c][ii] : Non-Expertised Parts of Registration Statement6-10
[A][3][c][iii] : Reliance upon Experts6-12
[A][3][d] : Effect of Earnings Statement6-13
[B] : Private Offerings6-14
[B][1] : Generalities6-14
[B][2] : Antifraud Liability Under Section 10(b)6-15
[C] : SEC Actions6-17
§ 6:2.2 : Communications with Shareholders Outside Offerings6-18
[A] : Periodic Filings Under the Exchange Act6-18
[A][1] : Generalities6-18
[A][2] : Liabilities6-22
[B] : Public Statements6-23
[C] : Regulation Fair Disclosure6-25
[D] : Forward-Looking Statements6-27
§ 6:3 : Obligations Related to Trading in Company Securities6-28
§ 6:3.1 : Insider Trading6-28
[A] : Background6-28
[B] : Use of Inside Information6-30
[C] : Indirect Insider Trading6-32
[C][1] : Expert Networks6-40
[D] : Insider Trading with Respect to Tender Offers6-41
[E] : Penalties and Damages6-45
[E][1] : Proper Forum6-46
§ 6:3.2 : Insider Reporting and Short-Swing Trading6-47
[A] : Insider Reporting6-47
[B] : Short-Swing Trading6-49
[C] : Prohibition on Short Sales6-52
§ 6:3.3 : Trading During Pension Blackout6-52
§ 6:3.4 : Resales of Privately Placed Securities6-54
§ 6:4 : Controlling Person Liability6-56
§ 6:4.1 : Basics and the Issue of Control6-56
§ 6:4.2 : Defenses6-57
§ 6:5 : Aiding-and-Abetting Liability6-58
§ 6:6 : Obligations Under ERISA6-60
§ 6:6.1 : Applicable Plans6-60
§ 6:6.2 : Plan Fiduciaries6-61
§ 6:6.3 : Bases for Liability6-64
§ 6:7 : Summary6-67
Criminal Liability and Other Significant Penalties
§ 7:2 : Basics of Criminal Liability7-4
§ 7:2.1 : Prosecutors7-4
§ 7:2.2 : Burden of Proof7-7
§ 7:2.3 : Wrongful Intent7-7
§ 7:2.4 : Theories of Liability7-8
[A] : Committing the Crime7-8
[B] : The Responsible Corporate Officer7-8
§ 7:2.5 : Penalties7-9
§ 7:3 : Key Criminal Statutes7-10
§ 7:3.1 : Federal Criminal Laws7-10
[A] : Crimes Under Securities Act or Exchange Act7-13
[B] : Securities Fraud7-15
[C] : Obstruction of Justice7-16
[D] : Improper Certification7-17
[E] : Retaliation Against Whistleblower7-18
[F] : Conspiracy7-19
[G] : Insider Trading7-19
[H] : Mail and Wire Fraud7-20
[I] : Foreign Corrupt Practices Act7-23
[I][1] : Anti-Bribery Provisions7-24
[I][1][a] : Intent7-26
[I][1][b] : Exceptions/DOJ Advice7-27
[I][1][c] : Penalties7-28
[I][2] : Internal Controls7-28
§ 7:3.2 : State Criminal Laws7-30
§ 7:4 : Sentencing7-33
§ 7:4.1 : Basics7-33
§ 7:4.2 : Sentencing Guidelines7-35
[A] : Sarbanes-Oxley Enhancements7-38
[B] : Sentence Reflecting Losses Caused7-39
[C] : Sentence Reflecting Cooperation with Prosecutors7-41
§ 7:5 : SEC Administrative Enforcement Powers7-42
§ 7:5.1 : Generalities7-42
§ 7:5.2 : Cease-and-Desist Powers, Disgorgement, Penalties7-43
§ 7:5.3 : Officer and Director Bar7-44
§ 7:5.4 : Corporate Monitor7-46
§ 7:6 : Criminal Liability of Public Corporations7-49
§ 7:7 : Summary7-66
§ 8:1 : Overview8-2
§ 8:2 : Liability Costs8-3
§ 8:3 : Indemnification8-5
§ 8:3.1 : Indemnification Statutes8-5
[A] : Coverage8-6
[B] : Proceedings8-7
[C] : Covered Liabilities8-7
[D] : Permissible Indemnification8-8
[D][1] : Third-Party Actions8-8
[D][2] : Corporate Actions8-10
[D][3] : Exclusions8-11
[D][4] : Corporate Determination8-11
[D][5] : Shareholder Disclosure8-12
[E] : Mandatory Indemnification8-12
[F] : Advances to Directors and Officers8-15
[G] : Court-Ordered Indemnification8-21
§ 8:3.2 : Contractual Indemnification8-22
[A] : Exclusivity of Statutory Indemnification8-23
[B] : Non-Exclusivity8-23
[C] : Safeguarding Indemnification Funds8-24
§ 8:4 : D&O Insurance8-25
§ 8:4.1 : Background8-25
§ 8:4.2 : Market for D&O Insurance8-26
§ 8:4.3 : Insurance Statutes8-27
§ 8:4.4 : Insurance Policies8-27
[A] : Claims8-28
[B] : Losses8-30
[C] : Exclusions8-31
[D] : Notice8-32
[E] : Defense of Litigation8-33
[E][1] : Defense Counsel8-34
[E][2] : Expense Advances8-34
[E][3] : Allocation Issues8-35
[E][4] : Settlements8-36
[F] : Outside Directors8-37
[G] : Change of Control8-37
[H] : Cancellation8-38
[I] : Effect of the Bankruptcy of the Company8-39
[J] : Disclosure of D&O Insurance8-40
§ 8:5 : Summary8-41
Index to Directors' and Officers' Liability