8.10.220 Actions by shareholders

8.10.220 Actions by shareholders.

(a) Any shareholder of record, the beneficial owner of share held by a nominee, or the holder of voting trust certificates of a corporation formed under the Yurok Tribe Business Corporations Code may file a petition in the Tribal Court for relief on the following grounds:

(1) The board of directors has, or will have, conducted the business and affairs of the corporation in a manner which is not in good faith, and is unfair or oppressive as to the petitioner.

(2) Such conduct shall include, but is not be limited to:

(A) Unfairly depriving the shareholder of the benefit of his/her investment in preference to other shareholders by failing to pay dividends which, in good faith, ought to be paid; or

(B) Using the payment of wages as an unfair device to divert income from the petitioner.

(3) Conditions exist that would be grounds for judicial dissolution of the corporation.

(b) In determining whether one or more of the conditions specified in subsections (a)(1) through (a)(3) of this section exist, the Court shall give due consideration to the strict fiduciary duty which shareholders of corporations formed under the Yurok Tribe Business Corporations Code owe one another.

(d) If the Court finds that one or more of the conditions specified in subsections (a)(1) through (a)(3) of this section exist, it shall order such relief as it deems appropriate, including, without limitation:

(1) Canceling, altering or enjoining any resolution or other act of the board of directors or shareholders;

(2) Directing or prohibiting any act of the board of directors or shareholders, directors, officers, or other persons party to the action;

(3) Canceling or altering any provision contained in the articles of incorporation or bylaws;

(4) Removing or appointing any director or officer;

(5) Requiring an accounting with respect to any matters in dispute;

(6) Appointing a trustee to temporarily manage the business of the corporation;

(7) Appointing a provisional director who shall have all the rights, powers, and duties of a duly elected director, to serve for the term, and under conditions, established by the Court;

(8) Ordering the payment of dividends;

(9) Awarding damages to any aggrieved party in addition to, or in lieu of, any other granted relief.

(e) If the Court finds the relief specified in subsections (d)(1) through (d)(9) of this section is, or would be, inadequate or inappropriate, it may order a winding up of corporate affairs, liquidation of assets, and dissolution of the corporation unless:

(1) Either the corporation, or one or more of the remaining shareholders, has purchased all of the shares of another shareholder at their fair market value by a designated date; and

(2) The fair market value of the shares and terms of the purchase shall be determined as provided in the Yurok Tribe Business Corporations Code.

(f) In the event the purchase of shares is not completed, and the corporation is dissolved, any shareholder whose shares were to be purchased shall have the same rights and priorities to the assets of the corporation as he/she would have had, had no purchase been ordered by the Court.

(g) In determining whether to enter a judgment under subsection (d) of this section, the Court shall take into consideration the financial condition of the corporation, but shall not refuse to order liquidation solely on the grounds that the corporation has earned surplus, or current operating profits.

(h) If the Court determines that any party to a proceeding brought under this section has acted arbitrarily, capriciously, or otherwise not in good faith, it may award reasonable expenses, including attorney’s fees and the costs of any appraisers or other experts, to one or more of the other parties.

(i) If the Court orders relief pursuant to subsection (a) of this section, the Court shall:

(1) Determine the fair market value of the shares to be purchased, taking into account:

(A) Any agreement among the shareholders fixing a price, or specifying a formula for determining the value of the corporation’s shares; and

(B) The recommendations of any appraiser appointed by the Court; and

(D) Any other relevant evidence.

(2) Enter an order specifying the identity of the purchaser and expressly stating that the terms of the purchase were found to be proper under the circumstances. Said order shall include such provisions as are deemed proper concerning:

(A) Payment of the purchase price in two or more installments; and/or

(B) Payment of interest on the installments; and/or

(D) Security for the deferred purchase price; and/or

(E) Covenants not to compete, or other restrictions on the selling shareholder.

(3) Order that the selling shareholder shall, concurrent with payment of the purchase price, or in the event of an installment purchase, concurrently with payment of the initial payment called for in the order, make delivery of all shares.

(4) From the date of the order issued in subsection (i)(3) of this section, the selling shareholder shall have no rights or claims against the corporation, its directors, officers, or shareholders by reason of having been a director, officer, or shareholder of the corporation, except the right to receive the unpaid balance of the amount awarded under this section, and any amounts due under any agreement with the corporation for the remaining shareholders that are not terminated by the Court’s order.

(5) Order that if the purchase is not completed in accordance with the Court’s order, the corporation shall be dissolved.

(j) The rights of a shareholder to file a proceeding under this section are in addition to, and not in lieu of, any other rights or remedies the shareholder may have. No shareholder shall be eligible to file an action under this section until he/she has exhausted nonjudicial remedies for resolution of the issues in dispute to which the shareholder has agreed in writing. [Ord. 18 Part II § 22, adopted, 10/7/2008.]