VOTING BY DIRECTORS

Right to Vote. To vote, directors must be present at board meetings either in person or by telephone, not by proxy.

Voting. Once a quorum of directors is present in a meeting, any action approved by a majority of those directors is passed. Corp. Code §7211(a)8 For example, if 3 directors of a 5-member board attend a meeting, a quorum has been achieved and the board may conduct business. Approval of any action is by a majority of the quorum, i.e., approval by 2 of the 3 directors.

The president is allowed to vote on all matters, provided there are no conflicts of interest requiring the president to withdraw from participation. Directors can also vote outside of a board meeting by unanimous written consent.

Loss of a Quorum. A meeting at which a quorum is initially present may continue to conduct business notwithstanding the withdrawal of directors provided that any action taken is approved by at least a majority of the required quorum for the meeting. For example, 3 of 5 directors attend a meeting thereby achieving quorum. One of the directors subsequently leaves the meeting causing a loss of quorum. The remaining 2 directors may continue conducting business provided both directors approve each item of business and provided that the items being approved only require the approval of a majority of a quorum rather than a majority of the entire board. Corp. Code §7211(a)8

Updated by ADAMS KESSLER 9/14/2008