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Later, as a result of advice by another attorney, changes
were made regarding Watson’s and Hughey’s control over AICR.
Under AICR’s original articles of incorporation, directors are
elected by, and may be removed without cause by, AICR’s founding
members, Watson and Hughey. Under amendments filed May 4, 1984,
any founding member is forbidden to elect or remove directors
“during any period in which such founding member has a commercial
relationship with the Corporation [AICR] and for a period of three
years thereafter.” For these purposes “the term `founding member’
shall be deemed to include any * * * partnership * * * in which a
founding member has a material interest.” These amendments also
provide as follows:
During any period that all founding members are
prohibited, or are abstaining, from exercising their
rights with respect to the election and removal of
Directors, Directors shall be elected and removed by the
affirmative vote of a majority of the entire Board of
Directors.
The Contract; Related Agreements
A. The Contract (June 11, 1984)
The Contract provides that, during its 5-year term, ending
May 30, 1989, W&H would be petitioner’s exclusive fundraising
consultant and adviser in petitioner’s conduct of its direct mail
fundraising solicitations. Petitioner agrees not to “retain or
use the services of any other person or company to provide counsel
and advice to [petitioner] in conducting its direct mail
solicitations.” W&H agrees to furnish its services and to advise,
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