Proxy
The authority granted by a shareholder to another person (the proxy holder) to vote the shareholder's shares at a shareholder meeting. The term also refers to the document evidencing that authority.
A proxy is the authority granted by a shareholder to another person (the proxy holder) to vote the shareholder's shares at a shareholder meeting. The term also refers to the document evidencing that authority.
Form and execution
A proxy must be executed in writing by the shareholder. An electronic transmission or a facsimile or similar reproduction of a signed writing counts as an execution in writing, but an electronic transmission must contain or be accompanied by information showing that the shareholder authorized it. § 21.367.
Term
A proxy is valid for the length of time specified in the proxy. If no term is specified, the proxy is valid for 11 months from the date of execution. § 21.368.
Revocability
A proxy is revocable by the shareholder unless the proxy is "coupled with an interest", for example, a proxy granted to a pledgee of the shares or to a person who has purchased or agreed to purchase them. § 21.369(a). A proxy is irrevocable only if the proxy form conspicuously states that it is irrevocable and the proxy is coupled with an interest. § 21.369(b).
Enforceability of irrevocable proxies
Under § 21.370, an irrevocable proxy is specifically enforceable against the shareholder and later holders if it is noted conspicuously on the share certificate or, for uncertificated shares, in the notice sent under § 3.205. Without that notation, it is ineffective against a transferee for value who lacked actual knowledge of it. Under § 21.371, the bylaws may set procedures for determining whether proxies are valid.
Proxies are central to public-company voting because most shareholders do not attend meetings in person. In closely-held corporations, proxies are common in connection with planned absences (illness, travel) or with structured shareholder agreements granting voting authority to designated persons.