3/28    http://local.live.com/default.aspx?v=2&cp=34.212651~-118.660726&style=o&lvl=1&scene=3064367
        Is this an example of how suburbs grow? First they carve out
        the road and then they build houses on top of it?

        shares is 1,000,000.  All 1,000,000 shares are issued, and employees
        are granted 10% of that, and the founder grants himself 90%.
        What's to prevent the founder from voting to double the number of
        authorized shares to 2,000,000 and screwing the employees with 2x
        dilution?  Other than all the employees getting pissed and leaving.
        \_ The board can do anything.  If you're a staffer and want to sue,
           you're welcome to but good luck on that.  You'll spend way more
           on lawyers than whatever you might have regained in a lawsuit and
           probably won't win anyway.
        \_ Word of advice, if the chair/founder/whatever is Ari Zilka, leave.
           He'll take most of the money and leave you suckers with
           almost nothing.
        \_ Nothing.  But, generally this is why small corporations have
           boards, and, if memory serves, the board must be at least 3 people,
           and, once a corporation gets to a certain number of employees, the
           board gets bigger. -dans
           \_ What if two of the three positions on the board of directors
              are occupied by the founder and his wife, in which case the
              founder will always get the majority vote?
              \_ Welcome to the wonderful world of business.
              \- Is the founder's name RIGAS? --psb
        \_ Merely issuing more shares would not directly screw the employees.
           If he did something like say grant himself 1,000,000 new shares
           that could be grounds for a shareholder lawsuit but good luck.
           \_ What about doubling the number of authorized shares?
        \_ We just started covering this in my bus org/corp law class. The
           way I understand it majority controlling shareholders have a
           fiduciary duty wrt to the minority shareholders. In the scenario
           you describe the maj shareholder has effectively reduced the
           voting power of the min shareholders by 1/2 (assuming that each
           of the new shares has one vote and the voting power of the old
           stock did not increase). By acting this way the maj shareholder
           has breached his fiduciary duty and the min shareholders can sue
           him for this breach.
           [ I might have this wrong, so I'll ask my bus org prof on thurs ]
        \_ Can the dude with 90% also pay himself a big salary, and thus
           take away all the profits of the company?