Proposing Amendments To Your Charter

Past Events

Considerations After Delaware’s Officer Exculpation Amendments; And Other Recent Delaware Statutory Amendments

November 14, 2022

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This program was a discussion focusing on a recent enabling amendment to the Delaware General Corporation Law that applies to all public and private Delaware-incorporated companies regarding the extent to which covered corporate officers may or should be exculpated from personal liability, as well as cover other recent Delaware statutory amendments.
 
For over 45 years, Delaware law has permitted directors of Delaware corporations to be exculpated from personal monetary liability to the extent such protections are set forth in the certificate of incorporation, subject to certain exceptions.  However, such protective statutory provisions did not extend to officers.  In August 2022, the Delaware legislature and the Governor of Delaware, on the recommendation of the highly respected Delaware Corporation Law Council, enacted amendments to the Delaware General Corporation law that would expand the right of a corporation to adopt an “exculpation” provision in its certificate of incorporation to cover not only directors (as has been allowed and widely adopted since 1986, following Smith v. Van Gorkom) but now also to corporate officers, subject to certain limits.  The amendment to Delaware law is not self-effecting but would allow companies to take action to adopt exculpation provisions that protect covered officers from personal liability for fiduciary duty claims, other than breaches of the duty of loyalty, intentional misconduct or knowing violations of law – with an additional exception that claims against officers will not be barred “in any action by or in the right of the corporation.”  Companies and boards themselves will retain the right to bring appropriate actions against officers, and this additional exception will permit stockholder derivative claims against officers for breach of the duty of care to continue to be brought if demand requirements are met.
 
Leading Delaware corporate law experts advocated for this enabling amendment in an article published last year entitled “Optimizing the World’s Leading Corporate Law: A 20-Year Retrospective and Look Ahead.” Questions that will be explored in the discussion include:

• what legal developments have occurred in recent years to prompt this legislative change,
• what companies and boards should consider doing now,
• whether or not publicly traded companies and their boards should take action to reduce the discrepancies between director and officer exculpation from liability by proposing amendments to the charter as permitted under the new law, and what information they should consider in making their decision,
• how this development may impact the upcoming proxy season,
• what kind of engagement with or disclosure to stockholders may be appropriate or helpful if proposing Charter amendments,
• what may be the implications for possibly reduced D&O insurance costs,
• what kinds of remedies will continue to be available to boards and stockholders for problematic officer conduct and
• whether or not the proposed limits to officer exculpation effectively advance and balance the best interests of corporations and their stakeholders (including stockholders).

In addition to the foregoing, there will also be a discussion of other recent Delaware statutory amendments of interest to attendees.

The participants were:

• Sabastian V. Niles Partner, Wachtell, Lipton, Rosen & Katz, Moderator
• Lawrence A. Hamermesh, Executive Director, Institute for Law & Economics, University of Pennsylvania Law School; Professor Emeritus, Widener University Delaware Law School
• Theodore N. Mirvis, Partner, Wachtell, Lipton, Rosen & Katz
• Patricia O. Vella, Partner, Morris, Nichols, Arsht & Tunnell LLP
• Justin P. Klein, Director, John L. Weinberg Center for Corporate Governance, Welcome
   

Materials:

DGCL Section 8 text (that includes Section 102)

“Optimizing the World’s Leading Corporate Law: A 20-Year Retrospective and Look Ahead”

“Amendments to Delaware General Corporation Law in 2022”

“Delaware Approves Permitting Exculpation of Officers from Personal Liability in Corporate Charters,”  Wachtell, Lipton, Rosen & Katz, August 3, 2022

Crisis At The Company-The Role Of Independent Directors In Steering The Company To Safe Waters

Past Events

October 25, 2022

Co-hosted by the Weinberg Center for Corporate Governance and Ballard Spahr LLP.

When a public company suffers a major financial or operational incident, such as a financial restatement, allegations of corporate wrongdoing, mass tort, FDA rejection, product recall or another existential event, it can present significant financial and reputational risks on multiple fronts, such as shareholder suits, class actions, conflicts with auditors, and governmental investigations brought by the Department of Justice, the SEC and other federal and state agencies.

Such events present unique and complex challenges. In many instances, the company’s independent directors will have a critical role in addressing such events. In some cases, the independent directors will have complete oversight of the company’s response to an existential event. This program will address:

• the responsibilities of independent directors in such a situation;
• best practices for properly discharging the fiduciary duty owed to the company; and
• the role of independent directors in conjunction with audit committees and special litigation committees.

Click HERE for information on Ballard Spahr.  Click HERE for information on the Weinberg Center. 
 
Tuesday, October 25, 2022

8:30 AM – 12:45 PM ET [Registration, continental breakfast, program and lunch]

CLE Credits: This program is approved for 2.0 Ethics CLE credits in CA, DE, NY, & PA; and 2.4 NJ Ethics CLE credits. Uniform Certificates of Attendance will also be provided for the purpose of seeking CLE credit in other jurisdictions.

 For the health and safety of our employees, clients, and friends, Ballard Spahr requires that attendees at our events and programs be fully vaccinated for COVID-19 and we will require proof of your COVID-19 vaccination to attend any Ballard Spahr event or program.

 Panelists:

Justin P. Klein
Director, John L. Weinberg Center for Corporate Governance,
University of Delaware

 David L. Axelrod
Partner, Ballard Spahr LLP

 John C. Grugan
Partner, Ballard Spahr LLP

 Timothy D. Katsiff
Partner, Ballard Spahr LLP

David J. Margules
Partner, Ballard Spahr LLP

 Kahlil C. Williams
Partner, Ballard Spahr LLP  Stacie L. Roberts
Vice President, Corporate Governance, Chesapeake Utilities Corporation

M. Norman Goldberger
Partner, Ballard Spahr LLP

April Hamlin
Partner, Ballard Spahr LLP

Laura E. Krabill
Partner, Ballard Spahr LLP

Jessica Case Watt
Partner, Ballard Spahr LLP

Co-hosted by the John L. Weinberg Center for Corporate Governance and Ballard Spahr LLP, this presentation provided a comprehensive guide to the decisive role independent directors play in these crisis situations.

Materials

Crisis At the Company Agenda
Crisis At the Company Presentation Slides
Crisis At the Company Handout
Crisis At the Company Cases and Articles
Crisis At the Company Panelist Profiles

Both/And in Women’s Leadership: Advancing Gender Equity from the Classroom to the Boardroom

Past Events

September 30, 2022

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Work or family. Today or tomorrow. Service to self or others. Intrinsic versus extrinsic motivation. These seemingly everyday challenges women business leaders face are often presented and perceived as “either/or” scenarios.

In their newly released book, “Both/And Thinking: Embracing Creative Tensions to Solve Your Toughest Problems”, co-authors Marianne Lewis and Wendy Smith offer a solution to those very challenges: a reframing of those “either/or” scenarios as something completely different — and, potentially, transformative.

Join us in a webinar as Marianne Lewis, dean and professor of management in the University of Cincinnati’s Carl H. Lindner College of Business and Wendy Smith, Dana J. Johnson Professor of Management in the University of Delaware’s Alfred Lerner College of Business and Economics talk with 4 successful female leaders about how they navigate both/and solutions to enable more female leadership and diversity in governance.

Susan Alexander – Stanford Distinguished Careers Institute Fellow, Former CHRO at Sotheby’s
Liza Bartle – Senior Council for Board of Manufacturers; Delaware Manufacturing Association
Ashlee Carlisle –Data and Platforms Account Executive, Google
Veta Richardson – President, CEO, Association of Corporate Counsel

“Both/And Thinking” has received attention from national media outlets such as Newsweek, MarketWatch and Fast Company. It has been named to The Next Big Idea Club’s list of “most promising, must-read nonfiction titles” released in August 2022. Adam Grant, a New York Times bestselling author and host of the TED podcast “WorkLife,” put “Both/And Thinking” on his list of “The 10 New Books to Enrich Your Thinking.”

Co-Sponsored by the University of Delaware’s Lerner College of Business and Economics Women’s Leadership Initiative, Weinberg Center for Corporate Governance and the University of Cincinnati Lindner School of Business

SPACs: Navigating Challenges in an Evolving Market

Past Events

Tuesday, May 17, 2022, 12:00 PM to 1:15 PM @Webinar/Virtual : 

Recording of Webinar

A discussion of current trends in a fast-changing SPAC market and recent developments impacting SPACs and their targets, including the SEC’s proposed new rules regarding SPAC transactions and litigation involving SPACs and companies that have gone public through SPAC transactions. The panel discussed issues and risks that management teams, boards of directors, advisors, and investors should consider in connection with evaluating and pursuing transactions involving SPACs.  The panelists are:

• The Honorable Lori Will, Vice Chancellor, Delaware Court of Chancery
• Tammy Mercer, Chair, Corporate Litigation and Counseling Group and Partner, Young Conaway Stargatt & Taylor, LLP
• Lori Zyskowski, Partner and Co-Chair of the Securities Regulation and Corporate Governance Practice Group, Gibson, Dunn & Crutcher LLP
• Evan D’Amico, Partner, Gibson, Dunn & Crutcher LLP (Moderator)

Bios

• The Honorable Lori Will
• Tammy Mercer
• Lori Zyskowski
• Evan D’Amico

Materials

• Slides:  SPACs: Navigating Challenges in an Evolving Market
• SEC’s proposed rule, “Special Purpose Acquisition Companies, Shell Companies, and Projections”
• “SEC Proposes Rules to Align SPACs More Closely with IPOs” (Gibson Dunn)
• Statement from SEC Chair Gary Gensler
• Statement from SEC Commissioner Peirce: 
• In re MultiPlan Corp. Stockholders Litigation
• “The New Age of Special Purpose Acquisition Companies:  What Investors Should Know,” CFA Institute, May 2022
• CFA Press Release

Delaware Law Update

Past Events

Wednesday, March 23, 2022, 11:00 AM to 12:30 PM

@Clayton Hall, University of Delaware : 

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This program will consist of two roundtables that will focus on recent developments and emerging issues in Delaware law. 

“Board Oversight Liability Three Years After Marchand –What Has Changed? What Still May Change?”

In the three years following the Delaware Supreme Court’s decision in Marchand v. Barnhill, 212 A.3d 805 (2019), the Delaware Court of Chancery has considered several motions to dismiss in high-profile cases alleging that a public company board of directors had failed to exercise oversight duties, dismissing some cases and allowing other cases to go forward.   Do these decisions represent an expansion of oversight liability and a change in a director’s standard of conduct, a shift in pleading standards, or both?  Relatedly, what are stockholder plaintiffs focusing on in bringing oversight claims and what are board counselors advising directors about the board’s path forward following an unsuccessful motion to dismiss? The roundtable participants are:

• Rolin Bissell, a Partner at Young, Conaway Stargatt & Taylor, LLP (Moderator)
• Joel Friedlander, Partner, Friedlander & Gorris, P.A.
• Meredith Kotler, Partner, Freshfields Bruckhaus Deringer
• Blake Rohrbacher, Director, Richards Layton & Finger

Materials:

• Panel Slides
  

“Recent Delaware Perspectives on Special Committees and  SPACs”

This panel will discuss two separate, but potentially related topics.  First, special committees:  the Delaware Court of Chancery continues to provide key guidance on the effective use of special committees, including in the context of “controller” transactions. Recent cases not only explore the attributes of a well-functioning committee process (and implications for the applicable standard of judicial review), but provide further evolving insight into what may constitute a “controller” under Delaware law.  Second, SPACs:  in a highly anticipated opinion, the Court of Chancery recently declined to dismiss In re MultiPlan Corp. Stockholders Litigation, providing a window into how the Court might assess future litigation over de-SPACing transactions.  The opinion has given rise to many “take-aways” and questions, including what role, if any, special committees might play going forward in order to mitigate risk in this new area of litigation.  The roundtable participants are:

• Jennifer Voss, a Partner at Skadden, Arps, Slate, Meagher & Flom LLP (Moderator)
• A. Thompson Bayliss – Abrams & Bayliss LLP
• Mark Lebovitch, Partner, Bernstein Litowitz Berger & Grossmann LLP
• Patricia Vella, Partner, Morris, Nichols, Arsht & Tunnell LLP

Materials:

• Panel Slides – Deck 1
• Panel Slides –  Deck 2
• The MH Haberkorn 2006 Trust v. Empire Resorts, Inc.
• In re Pattern Energy Group Inc. Stockholders Litigation
• In re MultiPlan Corp. Stockholders Litigation

UDaily Article