Corporate Management Question

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RunningAces18
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Joined: Sun May 06, 2012 11:41 am

Corporate Management Question

Postby RunningAces18 » Sun May 05, 2013 8:28 pm

Hello, I'm trying to prepare for a Corporations exam and still need to fine tune some of my basic understanding of simple hypos from earlier in the year. Hope someone can help.

OK, so you have a start-up tech company with 5 million outstanding shares currently held by 24 investors. One of them is CEO, who has 1000 shares. The company is negotiating for some much needed equity capital, and finds an Investor A who is willing to purchase 3 million shares if they can elect four of the nine members of the board. CEO is on board with the plan but will quit unless she is given one third of the voting power in the election of the board majority. How can be board satisfy CEO and Investor A and protect the interests of the corporation and other shareholders?



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