Term Paper Assignment Background BUS 660 - 2017 Background on Quality Products, LLC: Quality Products, LLC (QP), our hypothetical company for the Term Paper Assignment, is a private company (meaning its shares are not traded on a public stock exchange) and primarily makes optical lenses. QP has two main product lines: lenses for fashion eyewear; and lenses for applications like cameras, binoculars, telescopes, and digital projectors. QP also sells lenses for specialty applications, like magnifying glasses and rifle scopes, but this isn't the main focus of the business. QP's lenses are considered the absolute best in the market and are the result of extensive development and use of technological advances. Although QP has competitors, QP is by far the major company by sales and it is dominant in its industry. QP usually sells its products using its own sales force, but sometimes sells through sales agents or other distributors. Background on Bill Bright: Bill Bright is now three years out of school after getting his MBA. He works at QP as a Marketing Strategy Associate. Quality Products is a medium sized company, but is growing fast with expansion expected to continue within the U.S. and globally. Bill has had a lot of success already at Quality Products and he's clearly on a career fast track with the company. Bill has been told by his current manager - Betty Brilliant - that his next promotion will be to a junior manager position \"If he continues to perform\". This would be a sizable jump in pay and would set him up for a more senior position in the next five years, especially if the company keeps growing. Bill is just now starting to get control of his oppressive school debt. He is getting \"serious\" with a woman who is just out of school and who wants to build her own business based on her art history background. Betty called Bill into her office last week and told him that he was \"being evaluated\" by senior management and that part of this was a special assignment for another manager at the company - Sam Sneekin. Betty sent Bill to talk with Sam on the Monday morning we join this scenario. Sam is explaining to Bill that the company is looking to expand overseas and that Bill is now a part of a team to develop the expansion strategy. \"They do things a little differently than we do over there\Overall Instructions: There are three distinct parts to your paper. These three parts should all be in one file when you submit them and you should start each part on a new page. In Part 1 you must read the fact situation below and identify and clearly state the issues presented. Part 2 provides two legal issues and you must write a one page \"legal memo\" on each of them. For Part 3, you will write about your own personal approach to leading an ethical organization. Points will be allocated as follows: Part 1 (11 total points) o Identification of Issues (8 points) o Clarity of Issue Statement (3 points) Part 2 (10 total points) o Statement of Conclusion/Recommendation (3 points) o Analysis/Reasoning (7 points) Part 3 (6 total points) Overall Grammar/Style (3 points) Part 1 - Fact Situation: Identification of Issues Part 1 Detailed Instructions: You need to first read the Term Paper Assignment Background found in Canvas. The Term Paper Assignment Background provides the base information for this Term Paper assignment, but you are not asked to identify the issues in that background material. The fact situation below (starting with the numbered paragraphs) presents multiple legal and ethical issues. Your task for this part of the Term Paper is to identify the issues and provide a clear one or two sentence statement of the issue presented. An example from the Term Paper Assignment Background material would be \"Did Sam Sneekin discriminate against Emily Ethical due to her female gender when he requested that she be removed from the distribution team? If so, was this discrimination a violation of ethical principles and U.S. employment law?\" Notice that you don't have to know all the facts, or the answer to the question, to state the issue. Also, you should list the issue even if you don't believe there has been an actual violation of an ethical or legal principle. Each situation may raise multiple potential issues so give each issue separately. You should demonstrate that you can identify issues based on the ethical and legal materials we covered in class and the class readings. For this section of the Term Paper, you will be graded on your ability to identify relevant issues and on how clearly you draft the issue in one or two sentences. Please draft your issues as \"bullet points\" and organize them using the outline given in the fact situation below. As with the Ethical and Legal Case papers, the best issue statements will be in the form of a question. Please focus on the key issues so that this part of your Term Paper is no more than three pages, single spaced. Now, we pick up where the Term Paper Assignment Background left off... 1. Identify the three most critical issues that QP Legal is likely to raise regarding the below memo that was in the envelope that Sam gave to Bill. The memo looks like it is from a QP field representative in the country where the company is expanding. \"CONFIDENTIAL - DON'T PASS THIS ON TO ANYONE February 1, 2017 Sam and Steve, Wow, these people do business differently than we do! I have been able to talk with managers at a few potential customers already and every one of them is interested in what \"incentives\" we are going to offer to get their business. By this they mean what we are going to do for them personally, not what price discounts or delivery concessions we are going to offer their organizations. One guy even made it clear that he would buy our products with the right \"incentives\" even if we weren't the best on price, quality and delivery times. I think our strategy has to be to find the key guys and get them the incentives they want. This is usually just a weekend a month at a resort somewhere, a little bit of cash, or the like, something we can easily cover with the higher prices we can then charge. I'm told that these \"incentives\" are perfectly legal here, so we should be in the clear to move on this ASAP. I tried this out with one guy already and we have our first order for 2017! This international business stuff is really fun and we are going to make a killing here! Rick\" 2. Bill left the meeting with Nouv very excited about his new role. He was working on an important special project for the new company owner and would really have a chance to show his leadership potential. This was a time for him to shine and he immediately started thinking about how he would shape the project and boldly lead the team to a whole new set of compliance requirements in the revised Code of Conduct. The next day he was already meeting with the head of Human Resources and Strategic Planning. \"I need people on this team that can bring some fresh ideas.\" Bill said. \"I can't have anyone that wants the same old approach.\" Bill didn't even notice when the HR and Strategic Planning managers raised their eyebrows and glanced at each other; he was too focused on how to drive this \"Code project\" forward. Bill continued, \"OK, I'll need a team of four for this project and you have proposed 12 total candidates. Four of your suggestions have been around way too long to have the fresh ideas I'll be looking for so that leaves eight candidates. Of those eight, one is African American and one is Asian and that's not the \"image\" I want for this project. Another one is a woman who just got married so she probably won't stay with the company long enough to see the project to completion. One of the remaining five is someone who I know won't go along with anything I... I mean the team... decides, so she's out. The remaining four are my kind of guys, so we're ready to go.\" The HR and Strategic Planning directors couldn't even get a word in while Bill was talking and they were surprised when Bill wasn't receptive to their input on how the project should proceed. \"Nouv trusts me to lead this and with your four guys I'm sure I can get this one done quickly.\" Bill insisted. 3. Sam Sneekin heard about his impending \"release\" from the company the day before his scheduled meeting with Nouv. He didn't take the news well. He decided that he would leave a \"legacy\" at the company. In the course of 24 hours, he took the following actions: a. QP had been involved in a patent infringement dispute with one of its competitors, Best Optics, Inc., for over a year. The case had already been through \"document discovery\" and a few depositions had been taken. Sam knew one of the senior managers at Best Optics and called him to discuss the case. Sam told him, \"QP knows we infringed your patent and we are probably going to have to pay a large settlement. So far, we have been able to hide the evidence, but I can get it for you if you can get me a job at Best Optics if I ever need one.\" Sam's friend at Best Optics was excited about this news, especially since, as he said, Best Optics' stock price on the New York Stock Exchange would go up significantly if Best Optics got a big settlement from QP. Sam's friend accepted Sam's offer and Sam sent the evidence to him by e-mail. Sam then picked up the phone, called his stock broker and placed an order for 5,000 shares of Best Optics stock. b. Sam has been working directly with the new customer mentioned by Rick in the memo quoted above in QP's new overseas market. The customer placed a large order for lenses that are normally used in larger rifle sights, but the customer didn't say what they were going to use them for. Sam called the customer and verbally agreed to sell the lenses. The customer agreed and sent a fax confirming the terms of the sale based on the customer's standard terms and conditions. Sam signed the customer's documentation and ordered the lenses shipped before the end of the day. c. Sam went to lunch with his secretary at about 1:00pm the day before his meeting with Nouv. He ordered a bottle of wine and, after a few glasses, told his secretary how much he admired her and that he could get her promoted if she would have dinner with him (she wasn't aware that Sam would be leaving the company the next day). His secretary was not impressed by this offer and left immediately. Sam then took a seat at the bar and began to talk with the other patrons, while he drank several more drinks. As it turns out, one of the people eating lunch at the bar was a regular customer of QP. Sam loudly boasted that he could get anyone in the bar special pricing on QP products \"for this afternoon only\". Although the customer could see that Sam was intoxicated, Sam insisted on selling a shipment of lenses to the customer at a discount. The customer finished lunch, went back to his office and confirmed the sale by fax, giving the quantity, delivery, price and other relevant details. Sam continued drinking in the bar telling the bartender that he needed to stay to make additional sales for QP. The bartender was only too happy to continue to give Sam drinks (some of them free) since Sam was being so entertaining. Sam's \"sales activity\" ended when the bartender had to break up a physical fight between Sam and another patron. Sam came to his senses, apologized, and gave the other patron his QP business card saying \"My company will take care of any damage I've done.\" The other patron (who had a bloody nose and torn clothes as a result of the fight) took Sam's card, left the bar and called his lawyer. Sam was almost home when he \"blacked out\" and ran his car into a school bus full of elementary school children seriously injuring several of them. d. The next day, just before going into the meeting with Nouv, Sam sent an e-mail to all of his key industry contacts. The e-mail had jokes about racial and ethnic minorities, and women in the workplace and Sam closed the e-mail by saying \"I read this and it reminded me of Beatty Brilliant! I hope you never have to deal with her. She's the least truthful person I know.\" Sam signed the e-mail \"Sam Sneekin, VP Marketing, Quality Products, LLC\" e. After the meeting with Nouv, Sam was escorted to the door (without having any chance to collect his personal items) by the security guards that QP had hired as independent contractors as well as QP's HR manager. The security guards (who had never liked Sam because of the way he had treated them) grabbed Sam by the arms and took him \"the long way\" so that most of QP's employees could see what was happening. This was over Sam's objections and took a fairly long time, much to the satisfaction of the guards and many of QP's employees. 4. As you will recall, Sam Sneekin said that Emily Ethical was \"dead weight\SAMPLE BRIEF: SMITH V. VAN GORKOM FACTS: The shareholders of Trans Union Corporation sought rescission of a cash-out merger of Trans Union into New T Company, a wholly-owned subsidiary of Marmon Group, Inc. On September 13th, 1980, Jerome W. Van Gorkom, Trans Union's chairman and Chief Executive Officer, met privately with Jay A. Pritzker, a well-known corporate takeover specialist and one of the owners of Marmon, and proposed to Pritzker an opportunity to enter into a $55 per share cash-out merger. On September 15th, Pritzker notified Van Gorkom that he was interested in the cash-out merger proposal. On September 20th, Van Gorkom held a special meeting with the Senior Management of Trans Union, and subsequently met with the Company's Board one hour later. At the meeting with Senior Management, Van Gorkom disclosed the merger offer and described its terms, but did not furnish copies of the proposed Merger Agreement. Similarly, at the meeting with the Board, Van Gorkom provided a 20-minute oral presentation regarding the proposed Merger Agreement, but again failed to provide the written proposal. Based solely on Van Gorkom's oral presentation, supporting representations from Bruce Chelberg, President and Chief Operating Officer of Trans Union, an oral statement from Donald Romans, Chief Financial Officer of Trans Union, indicating that his preliminary study of the $55 per share did not indicate either a fair price for the stock or a valuation of the Company, and on James Brennan's legal advice, the Board approved the proposed Merger Agreement within two hours. Neither Van Gorkom nor any other director read the agreement prior to its signing and delivery to Pritzker. The Board approved for mailing around January 27th, 1981, a Supplement to its Proxy Statement which set forth details of the Merger Agreement, which had not been included in the first Proxy Statement mailed January 21st. On February 10th, the stockholders of Trans Union approved the merger ISSUE: Was the Board's decision reached on September 20th, 1980, to approve the proposed cash-out merger the product of an informed business judgment and did the Board provided complete candor to the stockholders before securing the stockholders' approval of the merger? CONCLUSION: No, the Board's decision reached on September 20th, 1980, to approve the proposed cash-out merger was not the product of an informed business judgment and the Board did not provide complete candor to the stockholders before securing the stockholders' approval of the merger. ANALYSIS/REASONING: Under Delaware law, business and affairs of a Delaware corporation are managed by or under its board of directors. Under the business judgment rule, there is no protection for directors who have made \"an unintelligent or unadvised judgment\