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1
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FINAL ORDER AND JUDGMENT
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EXTRACTED KEY WORDS
DELAWARE WRITTEN CONSENT PLAINTIFF SAM CHANCERY NATIONAL AUTO CREDIT BYLAWS FRANKINO DIRECTORS STOCKHOLJAR INVALID DELAWARE LAW MAJORITY WRITTEN EONSENT DESIGNEES MEMBERS L3OARD PETER ZACHAROFF DAVID HUBER DISSOLVE4 PARAGRAPH FGLF FORCE UNLIL UEXT MEETING PURSUANT CHANCERY RULE COSTS DEFENDANT CWQ-K |
FROM MNA&T (TUE)lL 9'99 15:26,'XT. 15:19/NO.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SA.M J. FRANKTNO, 1
Plaintiff, i Civil Action No. 17399-NC
V. i1
JOHN A. GLEASON, WILLIAM S.
MP;ICSmL, JAMES J. McNAMAR&
HENRY Y.L. TOH, RICHARD M. COHEN,
ALLEN D. RICE, and NATIONAL AUTO
CREDIT, `INC., a Delaware corporation,
Defendants.
FINAL ORDER AND JtJIK;MEm
For all of the reasons set forth in this Court's November 5, 1999 Memorandum
Opinion,
IT IS ORDERED, this @ day of November, 1999, that:
1. Article II, Section 10 of the Amended and Restated Bylaws ("Bylaws")
&fendat Nationd Auto Credit, Inc. (the "`Company"), which purports to prohibit stockholJar
action by written consent, is invalid under Delaware law.
2. All of the Bylaw amendments effected by plaintiff Sam J. Frarkino's
30,1999 majority written eonsent are- valid.
3. The following designees of plaintiff Sam J. Frankino were validly
the Company's Board of Directors by Mr. Fraukino's August 30,1999 majority written consent
are therefore members of the Company's l3oard of D&tons: Peter T. Zacharoff, David L. Huber,
Philip A. Sauder, Lorraine Dodero, Terry Swcitzcr, Donald Jasensky, and William T, Maund,
FROM MNA&T (TUE) 11, 9'99 15:26/ST. 15:19/NO.
SNIPPETS:
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2
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LETTER OPINION
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EXTRACTED KEY WORDS
FRANKINO JUDGEMENT COURT COSTS DIRECTORS HARM MOTION PLAINTIFF CONTROL SUFFER LAW KIRPAT DELAWARE PARAGRAPH ASSESSMENT DEFENDANTS ARGUE LITIGATION ASSERT CONTROL SUCCESS HARDSHIP LEGAL QUESTION FAIR GROUND ASSESS NAC ENTERING LIKELIHOOD MERITS IRREPARABLE HARM SUFFER SUBSTANTIAL HARM |
C OURT OF C HANCERY
OF THE
STATE OF D ELAWARE
WILLIAM B. C HANDLER III T HE F AMILY
C H A N C E L L O R November 12, 1999
GEORGETOWN . D
VIA FAX & U. S . MAIL
William M. Lafferty
Morris, Nichols, Arsht & Tunnel1
P.O. Box 1347
Wilmington, DE 19899
- - ,,
,. .
/ .,
.,- . .
Edward M. McNally _ `.., .
f,,! ,.
-.-
Morris, James, Hitchens & Williams -*> r, i
A%.
P.O. Box 2306
Wilmington, DE 19899
Re: Frankino v. Gleason
Civil Action No. 17399
Dear Counsel:
This letter resolves the parties' disagreement over the form of Order
to be entered in the above-captioned matter and rules on defendants' motion
to stay the judgment pending appeal. First, I will address the dispute over
the form of Order.
Defendants' object to the first two paragraphs of the form of Order
submitted by plaintiff on grounds that they "explain" the Court's November
5, 1999 Memorandum Opinion. I do not agree with this contention.
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3
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DEFENDANTS MOTION FOR STAY OF JUDGMENT PENDING APPEAL
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EXTRACTED KEY WORDS
APPEALING DEFENDANTS DELAWARE JUDGEMENT SUCCESS MOTION SUPREME COURT CHANCERY DEL SUPR LIKELIHOOD HARM TRIAL COURT LEGAL QUESTION LITIGATION NAC ENFORCEMENT OPINION GRANT MERITS MOVANT IRREPARABLE HARM SUFFER SUBSTANTIAL HARM KIRPAT REQUIRING CONTROL GRANTING DENIALS DETERMINATION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SAM J. FRANKINO, 1>
Plaintiff, 1>
V . > C. A. No. 17399-NC
)
JOHN A. GLEASON, WILLIAM S. )
MARSHALL, JAMES J. McNAMARA, )
HENRY Y .L. TOH, RICHARD M. >
COHEN, ALLEN D. RICE, and >
NATIONAL AUTO CREDIT, INC., a )
Delaware corporation, )1
Defendants. >
DEFENDANTS' MOTION FOR STAY OF
THE JUDGMENT PENDING APPEAL
Defendants, by and through their undersigned attorneys, respectfully move the
Court pursuant to Rule 62(d) for an order in the form attached hereto staying the effect of any
judgment in this case, pending disposition of defendants' appeal to the Delaware Supreme Court.
In support of this motion, defendants represent as follows:
1. On November 5, 1999, this Court entered a Memorandum Opinion (the
"Opinion"). The Opinion holds that plaintiff may elect his nominees to the board of National
Auto Credit, Inc. ("NAC").
2. The defendants will file a notice of appeal with the Delaware Supreme Court
from any judgment implementing the Opinion.
3. Pursuant to Court of Chancery Rule 62(d) and Article 4, section 24 of the
Constitution of the State of Delaware, this Court is authorized to stay the implementation of a
judgment pending disposition of an appeal. &e generally Sannini v. Casscells, Del. Supr., 401
A.2d 927 (1979).
4. In Delaware, in deciding whether to grant a stay pending appeal, courts
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4
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
VOTE DEFENDANTS MAJORITY PROVISION BYLAWS DEL SHAREHOLDERS SUPERMAJORITY AMENDMENT DIRECTORS WRITTEN CONSENT DELAWARE AMEND CONTROL STOCKHOLDERS SHARES SUPR NAC MEETING PROCEEDING COURT LANGUAGE INCORPORATION ALLEGE VOTING PURPORTING AGENCY RENT-A-CAR FACTS CERTIFICATE |
/ / I .
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SAM J. FRANKINO, >>
Plaintiff, >>
V. > Civil Action No. 17399
>
JOHN A. GLEASON, WILLIAM )
S. MARSHALL, JAMES J. >
McNAMARA, HENRY Y.L. TOH, )
RICHARD M. COHEN, ALLEN ) -"3
j-is "I : , ,/ . .
,&)`I ,' ,I'
D. RICE, and NATIONAL AUTO ) I-,* -.. _ ,i..l
:. --, (
c :,
CREDIT, INC., a Delaware ) ,./.t *`:::'
;7 i
corporation, 7..%c*
> I cl
-*i-?..(.
> 1'7;::. 2 -ii.
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5
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LETTER TO CHANCELLOR CHANDLER
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EXTRACTED KEY WORDS
DIRECTORS DEFENDANTS ANNUAL MEETING ELECTION COURT MARSHALL GLEASON HONORABLE WILLIAM FRANKINO CHANDLER SEATS NOMINEES PARAGRAPH MOTION NOMINATIONS VOTE CHANCELLOR INSPECTOR RICE ESQUIRE COUNSEL PENDENCY MODIFY GRANT THORNTON WRITTEN CONSENT BALLOT PROXIES VOTING DANIEL |
M ORRI S , N ICHOL S , ARSHT & TUNNELL
I 201 N O R T H M A R K E T S T R E
P.O. Box 1347
W I L M I N G T O N . D E L A W A R E
T E L E P H O N E (302)
TELECOPY f3C21 658-3989
(302)57S-7341
September 21, 1999
roN*THAN 1 LESSNER
R O B E R T J. OEHNEY
COLM F. C O N N O L L Y
VIA FACSIMILE
The Honorable William B. Chandler III
Chancellor
Court of Chancery
Family Court Building
The Circle
Georgetown, DE 19947
Re: Frankino v. National Auto Credit, Inc., C.A. Nos.
& 17209-NC; Frankino v. Gleason. et al.. C.A. N --k--
Dear Chancellor Chandler:
This letter is respectfully submitted in support of plaintiff
motion to modify the Stipulated Order Maintaining Status Quo ("Status Quo Order")
the Court on September 3, 1999 in C.A. No. 17399-NC (the "Section 225 Action").
As Your Honor no doubt recalls, on September 8, 1999, National
Inc. ("NAC" or the "Company") filed a motion to postpone the Company's 1999 annual
stockholders' meeting ("Annual Meeting") that was ordered previously by the Court in
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6
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VERIFIED COMPLAINT
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EXTRACTED KEY WORDS
STOCKHOLDERS WRITTEN CONSENT BYLAWS DIRECTORS DEFENDANT MEETING APPOINTING PROVISION ANNUAL MEETING NATIONAL AUTO AMENDMENTS MATERIALS PURPORTS WILLIAM DELAWARE LAW ELECTION EXPIRES DEMAND VOTE DAVID HUBER PHILIP SAUDER LORRAINE DODERO TERRY SWEITZER DONALD JASENSKY CERTIFICATE INCORPORATION |
"\, 2' IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SAM J. FRANKINO, >
>
Plaintiff, >
> Civil Action No. ) ?sy?NC
V.
J O H N A . GLEASON, WILLIAM s.
MARSHALL, JAMES J. McNAMARA,
HENRY Y.L. TOH, RICHARD M. COHEN,
ALLEN D. RICE, and NATIONAL AUTO
CREDIT, INC., a Delaware corporation,
Defendants.
VERIFIED COMPLAINT
Plaintiff, by and through his undersigned attorneys, for his complaint
follows:
Nature of the Action
1. This is an action for a declarato-ry judgment and pursuant to Section
the Delaware General Corporation Law ("DGCL") seeking, among other things, entry of an
order confirming that plaintiff Sam J. Frankino's designees, Peter T. Zacharoff, David L.
Philip A. Sauder, Lorraine Dodero, Terry Sweitzer, Donald Jasensky, and William T. Mamnd
were validly elected to the Board of Directors of defendant, National Auto Credit, Inc.
Auto" or the "Company").
Parties
2. The plaintiff, Sam J. Frankino, is a record holder of shares of the
Company. Plaintiff owns or controls approximately 55% of the outstanding common stock of
Company, and served as an officer and director of the Company until he resigned in March
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