| Corporate law issue | DGCL | Guernsey Companies Law | ||||||
| Shareholder meetings | •Shareholders generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or bylaws. If a corporation fails to hold its annual meeting within a period of thirty (30) days after the date designated for the annual meeting or, if no date has been designated, for a period of thirteen (13) months after its last annual meeting or the last action by written consent to elect directors in lieu of an annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder or a director. •May be held at such time or place as designated in the certificate of incorporation or the bylaws or, if not so designated, as determined by the board of directors. •May be held inside or outside of the State of Delaware. •Notice: oWhenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any, the record date for determining the shareholders entitled to vote at the meeting, if such date is different from the record date for determining shareholders entitled to notice of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. oWritten notice shall be given not less than ten (10) nor more than sixty (60) days before the meeting. •The board of directors may fix a record date, which shall not be less than ten (10) nor more than sixty (60) days before the meeting. | •Unless a company’s memorandum of incorporation or articles of incorporation state otherwise, the directors are required to call a general meeting once the company receives requests to do so from shareholders who hold more than ten percent (10%) of the share capital of the company that carries the right of voting at general meetings (excluding treasury shares). •Unless the shareholders pass a resolution exempting a company from holding an annual general meeting, the company must hold a general meeting of its members within a period of eighteen (18) months beginning on the date on which it was incorporated and thereafter at least once every calendar year (with no more than fifteen (15) months elapsing between one annual general meeting and the next). •Subject to the articles of incorporation, a meeting may be held at any place in Guernsey or elsewhere. •Notice: oA meeting must be called by at least ten (10) days’ notice or such longer period as provided by the articles of incorporation. oA meeting may be called by shorter notice if all shareholders entitled to attend and vote so agree. oThe notice shall specify the date, time and place of the meeting, the information of any resolutions to be passed at the meeting and such other information as is required by the articles of incorporation. | ||||||
| Shareholders’ voting rights | •With limited exceptions, and unless the certificate of incorporation provides otherwise, shareholders may act by written consent to elect directors. •Each shareholder entitled to vote may authorize another person or persons to act for such shareholder by proxy. •The certificate of incorporation or bylaws may specify the number to constitute a quorum, but in no event shall a quorum consist of less than one-third (1/3) of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote, present in person or represented by proxy, shall constitute a quorum. •The certificate of incorporation may provide for cumulative voting. | •Unless the memorandum of incorporation or articles of incorporation provide otherwise, directors are appointed by ordinary resolution of the shareholders. •Any shareholder may appoint another person or persons to be their proxy to exercise all or any of their rights to attend, speak and vote at a meeting. •Subject to the articles of incorporation, the quorum shall be two (2) shareholders holding five percent (5%) of the total voting rights of the company between them present at a meeting. •Subject to certain limited exceptions, a provision of the articles of incorporation is void to the extent that it would have the effect of excluding or making ineffective a demand for a poll at general meeting. | ||||||
| Directors | •The board of directors must consist of at least one (1) director and is not subject to a maximum number of directors. •The number of directors shall be fixed by, or in the manner provided in, the bylaws, unless the certificate of incorporation fixes such number, in which case a change in the number shall be made only by amendment of the certificate of incorporation. •A classified board of directors is permitted. •The board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws. •Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote subject to exceptions that only apply to corporations with classified boards of directors or cumulative voting (e.g., unless the certificate of incorporation provides otherwise, in the case of a classified board of directors, shareholders may effect removal only for cause). | •Subject to the articles of incorporation, the board of directors must consist of at least one (1) director and is not subject to a maximum number of directors. •A person will cease to be a director if such person: oprovides written notice of his or her resignation to the company; ois removed in accordance with the memorandum of incorporation and articles of incorporation; obecomes ineligible to be a director under the laws of Guernsey; odies; or ootherwise vacates office in accordance with the memorandum of incorporation and articles of incorporation. | ||||||
| Interested shareholders’ transactions | •The DGCL contains a business combination statute applicable to corporations whereby, unless the corporation has specifically elected not to be governed by such statute, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three (3) years following the date that such shareholder becomes an interested shareholder, unless certain conditions are met. An interested shareholder generally is a person or a group that owns at least fifteen percent (15%) of the corporation’s outstanding voting stock. •The prohibition on business combinations with interested stockholders does not apply in some cases, including if: othe corporation’s board of directors, prior to the time of the transaction in which the stockholder became an interested stockholder, approves the business combination or the transaction in which the stockholder becomes an interested stockholder; oupon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least eighty-five percent (85%) of the voting stock (excluding stock owned by certain persons) of the corporation outstanding at the time the transaction commenced; or oat or after the time of the person became an interested stockholder, the corporation and the holders of at least two-thirds (2/3) of the outstanding voting stock not owned by the interested stockholder approve, at an annual or special meeting of stockholders, and not by written consent, the business combination. | •The Guernsey Companies Law does not contain any specific prohibition on interested shareholder transactions. •The Company is subject to the UK City Code which provides that, if an acquisition of an interest in a company’s shares were to increase the aggregate holding of an acquirer and its “concert parties” to an interest in the company’s shares carrying thirty percent (30%) or more of the voting rights in the company, the acquirer and, depending upon the circumstance, its concert parties, would be required (except with the consent of the UK Takeover Panel) to make an offer in cash (or accompanied by a cash alternative) for all other shares of the company at a price not less than the highest price paid for any interest in the company’s shares by the acquirer or its concert parties during the twelve (12) months prior to the announcement of the offer. A similar obligation to make such a mandatory offer would also arise on the acquisition of a company’s shares by a person (together with its concert parties) interested in the company’s ordinary shares carrying between thirty percent (30%) and fifty percent (50%) of the voting rights in the company if the effect of such acquisition were to increase the percentage of shares carrying voting rights in which such person is interested. See “Compliance with the UK City Code” for additional information. | ||||||
| Interested directors’ transactions | •Interested director transactions are permissible and may not be legally voided if: othe material facts of the director’s interest are disclosed and a majority of the disinterested directors approve the transaction; othe material facts of the director’s interest are disclosed and a majority of the shareholders entitled to vote approve the transaction; or othe transaction is determined to have been fair to the corporation at the time it is authorized, approved or ratified by the board of directors, a committee thereof or the shareholders. | •A director must, immediately after becoming aware of the fact that such director is interested in a transaction or proposed transaction with the company, disclose to the board of directors the nature and extent of such director’s interest. •Subject to the memorandum of incorporation and articles of incorporation, a director who is interested in a transaction may vote, attend meetings of the board of directors, sign documents and do any other thing in such director’s capacity as a director in relation to a transaction in which such director is interested as if such director was not interested in the transaction provided that such director has made the necessary declarations. •A transaction in which a director is interested is voidable by the company at any time within three (3) months of the date after which the transaction is disclosed to the board of directors unless: othe director’s interest was disclosed at the time the transaction was entered into or a disclosure was not required (e.g., if the transaction is entered into in the ordinary course of business and on usual terms and conditions); othe transaction is ratified by the shareholders; or othe company received fair value for the transaction. | ||||||
| Dividends | •The board of directors may declare and pay dividends, subject to any restrictions contained in the certificate of incorporation, upon the shares of the corporation’s capital stock either out of its surplus or, in case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year. The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of the corporation. | •A company may pay a dividend if the board of directors is satisfied on reasonable grounds that the company will, immediately after payment of the dividend, satisfy the statutory solvency test contained in the Guernsey Companies Law as well as any other requirement of the memorandum of incorporation or articles of incorporation. •A dividend may be of such amount, be paid at such time and be paid to such members as the board of directors thinks fit; provided, however, that the directors must not authorize a dividend in respect of some but not all of the shares in a class or that is of a greater value per share in respect of some shares of a class than in respect of other shares of that class. •Subject to the articles of incorporation, there is no requirement for dividends to be paid out of a particular account or source. | ||||||
| Variation of rights of class of shares | •A corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. | •A company may only vary the rights of a class of shareholders in accordance with the provisions of the articles of incorporation or, in the absence of such provisions, with the consent in writing from the holders of at least seventy-five percent (75%) in value of the issued shares of that class or by means of a special resolution passed by at least seventy-five percent (75%) in value of the issued shares of that class (excluding treasury shares) at a separate meeting of shareholders of that class. | ||||||
| Mergers and similar arrangements | •Under the DGCL, with certain exceptions, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. •The DGCL also provides that a parent corporation may, by resolution of its board of directors, merge with any subsidiary of which it owns at least ninety percent (90%) of each class of capital stock without a vote by the shareholders of such subsidiary. | •Subject to the articles of incorporation, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a company may be negotiated and approved by the board of directors. Depending on the structure of such a transaction, a separate shareholder approval may be required. •If within a period of four (4) months after the date of an offer being made in respect of a transfer of shares, the offer is approved or accepted by the shareholders comprising not less than ninety percent (90%) in value of the shares affected, the offeree may, within a period of two (2) months immediately after the threshold is achieved, give notice to any dissenting shareholders of its desire to acquire the remaining shares. •On the expiration of one (1) month from the date of the notice to acquire, the offeror will be entitled to acquire the shares of the dissenting shareholder(s) by sending them a copy of the notice to acquire and by paying or transferring to them the consideration that such shareholder(s) is/are entitled to in respect of those shares, at which point the offeror shall be registered as the holder of those shares. | ||||||
| Appraisal rights | •A shareholder of a corporation participating in certain major transactions may, under certain circumstances, be entitled to appraisal rights under which the shareholder may receive cash in the amount of the fair value of the shares held by such shareholder in lieu of the transaction consideration. | •The Guernsey Companies Law does not specifically provide for any appraisal rights of shareholders. The Guernsey Companies Law does, however, give the Royal Court of Guernsey broad authority in respect of orders made pursuant to successful unfair prejudice claims under the Guernsey Companies Law. | ||||||
| Shareholder suits | •Class actions and derivative actions generally are available to shareholders for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action. | •A shareholder may commence or continue a claim as a representative of those with the same interests in the claim. Unless the court directs otherwise, any judgment in which a party is acting as a representative will be binding on all persons represented. •Derivative actions are also available to shareholders in respect of a cause of action arising from an actual or proposed act or omission involving, among other things, breach of fiduciary duty and/or breach of trust by a director of the company. •Costs are awarded by the court at its discretion. The normal order is for the winning party to recover its costs incurred in connection to the action. | ||||||
| Limitations on directors’ liability and indemnification of directors and officers | •A corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors or officers to the corporation or its shareholders for monetary damages for certain breaches of fiduciary duty. However, such provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (for directors only) the authorization of unlawful dividends, stock purchases or redemptions, or any transaction from which a director or officer derived an improper personal benefit, or (for officers only) any actions by or in right of the corporation. Moreover, these provisions would not be likely to bar claims arising under US federal securities laws. •A corporation may indemnify a director or officer of the corporation against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of any action, suit or proceeding by reason of such person’s position if (i) the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the person had no reasonable cause to believe the conduct was unlawful. | •A company may include in its articles of incorporation provisions limiting the liability of its directors (and officers or other persons); provided, however, that any provision that purports to exempt a director from any liability in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. •Any provision by which a company directly or indirectly provides an indemnity for a director of the company, or any associated company, against any liability in connection with any negligence, default, breach of duty or breach of trust is void, except that: oa company is not prevented from purchasing and maintaining for a director of the company, or any associated company, insurance against any such liability; and osuch restriction does not apply to a qualifying third-party indemnity provision, which is a provision for indemnity against liability incurred by a director to a person other than the company or an associated company that does not provide any indemnity against a prescribed list of liabilities, including certain fines and penalties and liabilities incurred in defending certain proceedings. | ||||||
| Directors’ fiduciary duties | •Directors of a Delaware corporation owe fiduciary duties to the corporation and its shareholders. The two core duties are the duty of care and the duty of loyalty. oThe duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself or herself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. oThe duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. •In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, such director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation. | •The duties of directors in Guernsey are generally owed to the company and its shareholders as a whole rather than to any other person or particular shareholders (subject to certain exceptions) and arise from customary laws, statutory laws and contractual obligations. •Customary law duties of directors include: oa duty to act in good faith, in the best interests of the company and not for any collateral purpose; oa duty to exercise powers for a proper purpose. Even if a director is acting in good faith and in the best interests of the company, such director must nevertheless use his or her powers for the proper purpose for which they were conferred; oa duty to avoid and mitigate conflicts of interest; and oa duty to account for profits. As a fiduciary, a director may not take a personal profit from opportunities arising from such director’s office, even if the director is acting honestly and in the best interests of the company. Any such profit must be paid to the company. A director’s entitlement to remuneration and payment of expenses will be governed by the company’s articles of incorporation. •Statutory duties of directors include: oa general duty to manage the business and affairs of the company; and oconsidering a solvency test in various circumstances, including in authorizing distributions and dividends by the company to its shareholders. | ||||||
| Inspection of books and records | •All shareholders have the right, upon written demand, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any purpose reasonably related to such person’s interest as a shareholder. | •The register and index of members, register of directors, register of secretaries and copies of all resolutions of shareholders passed other than at general meetings and minutes of the proceedings of general meetings, in each case, in the last six (6) years after the date of the resolution, meeting or decision, as the case may be, must be open for the inspection by any shareholder of the company without charge during ordinary business hours. They must also be open for inspection by any other person upon payment of such fee as may be prescribed by the States of Guernsey Committee for Economic Development or such lesser fee as the company may request. •When a company receives a request to inspect its records, the company must comply with that request in accordance with the Guernsey Companies Law or apply to the Guernsey courts for a direction not to comply. | ||||||
| Amendments of governing documents | •Subject to certain exceptions, amendments to the certificate of incorporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon, unless the certificate of incorporation provides otherwise. Bylaws may be amended with approval of a majority of the outstanding shares entitled to vote thereon and may, if provided in the certificate of incorporation, also be amended by the board or directors. | •Subject to certain exceptions, such as the alteration of the statement of the company’s name, a company may only make or alter a provision of its memorandum of incorporation in accordance with the terms of the memorandum of incorporation or by unanimous resolution of all of its shareholders. •A company may alter its articles of incorporation by means of a special resolution passed by at least seventy-five percent (75%) of the shareholders. | ||||||
| Dissolution and winding up | •Unless the board of directors approves the proposal to dissolve, dissolution must be approved by all of the shareholders. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. | •A company may be dissolved by means of a compulsory or voluntary winding up or a compulsory or voluntary striking off. •An application for the voluntary winding up requires a special resolution of the members passed by a majority of at least seventy-five percent (75%) of the shareholders and a declaration of solvency stating that, in the opinion of the board of directors, the company satisfies the statutory solvency test. •An application for the voluntary striking off must be made by the board of directors and be accompanied by a declaration of compliance confirming that all requirements of the Guernsey Companies Law with respect to the striking off have been complied with. | ||||||