In Connection with a Shareholder Agreement to Restrict the Transfer

question 47

Multiple Choice

In connection with a shareholder agreement to restrict the transfer of stock,how does a "right of first refusal" work?

• A) A shareholder desiring to sell shares must first offer those shares to the other existing shareholders, or to the corporation.
• B) The corporation has the right to prevent a shareholder from selling shares.
• C) A shareholder who sells shares retains the right to vote those shares, and the purchaser only receives the right to receive any dividends declared.
• D) Members of the board of directors have the right to reacquire shares sold by a shareholder so someone not a party to the agreement cannot acquire them.
• E) A shareholder who sells shares retains the right to dividends, and the purchaser retains the right to vote the shares and to receive their fair market value upon corporate liquidation.

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Definitions:

Mismatched Cultures

Occurs when there is a lack of alignment or incongruence between the cultures of merging organizations, potentially leading to conflict and inefficiency.

Executive Power Struggles

Refers to conflicts among high-ranking leaders or executives within an organization, often related to clashes over control, direction, and decision-making authority.

Organizational Cultural Hindrance

Barriers or obstacles within an organization's culture that impede progress, change, or the achievement of goals, often due to entrenched attitudes or norms.

Mergers And Acquisitions Hindrances

Refers to obstacles or challenges that can impede or complicate the process of merging or acquiring companies, such as cultural differences, regulatory issues, or financial constraints.