Title 18 — Business Structure and Function

(a) Action required or permitted by this Act to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents describing the action tak…

(a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders’ meeting no fewer than 10 nor more than 60 days before the meeting date. Unless this Act or the articles of incorporation require otherwise, the corporation is require…

(a) A shareholder may waive any notice required by this Act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation fo…

(a) The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders’ meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix o…

(a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders’ meeting. The list must be arranged by voting group (and within each voting group by class or series of…

(a) Except as provided in subsections (b) and (c) or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders’ meeting. Only shares are entitled to vote. (b) Absent speci…

(a) A shareholder may vote his shares in person or by proxy. (b) A shareholder or his agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholders by signing an appointment form or by an electronic transmission if electronic transfer is permitted by…

(a) A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure. (b) The procedure may set forth…

COL372014 (a) If authorized by the board of directors in its sole discretion, and subject to such guidelines and procedures as the board of directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication…

(a) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or this Act provide otherwise, a majority of the votes entitled to be cast on …

(a) If the articles of incorporation or this Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in § 28713. (b) If the articles of incorporation or this Act provide for voting by two or more…

(a) The articles of incorporation may provide for a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is provided for by this Act. (b) An amendment to the articles of incorporation that adds, changes, or deletes a greater quorum or voti…

(a) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. (b) Shareholders do not have a right to cumulate their votes for direct…

(a) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust (which may include anything consistent with its purpose) and transferring their shares to t…

(a) Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of § 28717. (b) A voting agreement created under this section is s…

(a) An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Act in that it: (1) eliminates the board of directors or restr…

In this subarticle: (a) Derivative proceeding means a civil suit in the right of a domestic corporation. (b) Shareholder includes a beneficial owner whose shares are held in a voting trust or held by a nominee on the beneficial owner’s behalf.

A shareholder may not commence or maintain a derivative proceeding COL372014 unless the shareholder: (a) was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a sharehold…

No shareholder may commence a derivative proceeding until: (a) a written demand has been made upon the corporation to take suitable action; and (b) 90 days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rej…

If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.

(a) A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in subsections (b) or (f) has determined in good faith after conducting a reasonable inquiry upon which its conclusions are based that the maintenance of the de…

A derivative proceeding may not be discontinued or settled without the court’s approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation’s shareholders or a class of shareholders, the court shall dire…

On termination of the derivative proceeding the court may: (a) order the corporation to pay the plaintiff’s reasonable expenses (including counsel fees) incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; (b) order …

(a) Except as provided in § 28719, each corporation must have a board of directors. (b) All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed by or under the direction of, its board of directors, subject to a…

The articles of incorporation or bylaws may prescribe qualifications for directors. A director need not be a resident of Guam or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe.

(a) A board of directors must consist of one or more individuals, with the number specified in the articles of incorporation or bylaws. (b) Directors are elected at the first annual shareholders’ meeting and at each annual meeting thereafter unless their terms are staggered under…

If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares. A class COL372014 (or classes) of shares entitled to ele…

(a) The terms of the initial directors of a corporation expire at the first shareholders’ meeting at which directors are elected. (b) The terms of all other directors expire at the next annual shareholders’ meeting following their election unless their terms are staggered under §…

The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing one-half or one-third of the total, as near as may be. In that event, the terms of directors in the first…

(a) A director may resign at any time by delivering written notice to the board of directors, its chairman, or to the corporation. (b) A resignation is effective when the notice is delivered.

(a) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be COL372014 removed only for cause. (b) If a director is elected by a voting group of shareholders, only the shareholders of that voting gr…

(a) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: (1) the shareholders may fill the vacancy; (2) the board of directors may fill the vacancy; or (b) I…

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

(a) The board of directors may hold regular or special meetings in or out of Guam. (b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meetin…

(a) Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by this Act to be taken at a board of directors’ meeting may be taken without a meeting if the action is taken by all members of the board. The action must be evidenced by one or mo…

(a) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held with notice of the date, time, place, or purpose of the meeting. (b) Unless the articles of incorporation or bylaws provide for a longer or shorter period,…

(a) A director may waive any notice required by this Act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. (b) A director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the dire…

(a) Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in this Act, a quorum of a board of directors consists of a majority of the number of directors specified in the articles of incorporation or bylaws. (b) If a quo…

(a) Unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee must have two or more members, who serve at the pleasure of the board of dir…

(a) Each member of the board of directors, when discharging the duties of a director, shall act (1) in good faith; and (2) in a manner the director reasonably believes to be in the best interests of the corporation. (b) The members of the board of directors or a committee of the …

(a) A director shall not be liable to the corporation or its shareholders for any decision to take or not to take actions, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes that: (1) any provision in the Articles of…

(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to §§ 28616 (a) or 281409 (a) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating…

(a) A corporation has the offices described in its bylaws or designated by the board of directors in accordance with the bylaws. (b) The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authori…

COL372014 Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the duties o…

(a) An officer with discretionary authority shall discharge the officer’s duties under that authority: (1) In good faith; (2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) In a manner the officer reasonably belie…

Insurance. (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or…

For this Subarticle the following definitions apply: (a) Conflicting interest with respect to a corporation, means the interest a director of the corporation has respecting a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation…

(a) A transaction effected or proposed to be effected by a corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) that is not a director’s conflicting interest transaction may not be enjoined, set aside, or give…

(a) Directors’ action respecting a transaction is effective for purposes of § 28861(b)(1) if the transaction received the affirmative vote of a majority but no fewer than two (2) of those qualified directors on the board of directors or on a duly empowered committee of the board …

(a) Shareholders’ action respecting a transaction is effective for purposes of § 28861(b)(2) if a majority of the votes entitled to be cast by the holders of all qualified shares were cast in favor of the transaction after (1) notice to shareholders describing the director’s conf…