January 8, 2024

More on: A Charter Amendment Fix for Con Ed Clause Enforceability Issues

Last week, John shared a blog from Tulane Law prof Ann Lipton flagging a recent transaction where the parties contemplated a charter amendment in the merger agreement to fix the Con Ed clause enforceability issues highlighted by Chancellor McCormick’s recent decision in Crispo v. Musk. The company hasn’t filed its proxy statement yet, but Sacha Jamal of Sidley Austin pointed us to Exhibit B of the merger agreement for the language of the proposed charter amendment. Here it is:

To the fullest extent permitted by law, (i) the Corporation is designated as the stockholders’ sole and exclusive agent with the exclusive right to pursue and recover any remedies on behalf of stockholders under that certain Agreement and Plan of Merger, dated as of December 17, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Corporation, Masonite International Corporation, a British Columbia corporation, and Peach Acquisition, Inc., a Delaware corporation, including under Section 11.06 thereto, pursuant to which, in the event that specific performance is not sought or granted as a remedy, the Corporation may pursue and recover damages or other amounts set forth in Section 11.06 of the Merger Agreement, and (ii) any amounts or damages recovered by the Corporation on behalf of the stockholders, whether through judgment, settlement or otherwise, shall, in the sole discretion of the Board of Directors (subject to its fiduciary duties), be distributed to the stockholders by a dividend, stock repurchase or buyback or in any other manner.

We still plan to look out for the proxy statement and share interesting disclosures here.

Meredith Ervine