1. Recording Date: Whoever is a stockholder on this date has right to vote (SECTION 532)
2. NOTICE: Must include the following or action taken may be voided. (SECTION 539)
2.1. 10 to 60 day prior notice of meeting.
2.2. Place of Meeting
2.3. Date of the Meeting
2.4. Hour of the Meeting
2.5. If special meeting, Purpose of the Meeting
3. Number of Votes
3.1. Ordinary Matters: Unless articles provide otherwise, one vote per share. (SECTION 543)
3.1.1. Majority of votes cast required to pass
3.2. Fundamental Changes: Same as Ordinary Matters (SECTION 543)
3.2.1. More than simple majority required to pass.
3.3. Election of Directors
3.3.1. Straight Vote: Same as Ordinary and Fundimental
3.3.2. Cumulative Voting: Shareholders get as many votes as there are directors for each of their shares. Can be divided amongst candidates or all given to one. (SECTION 548)
3.3.2.1. Allowed only if articles provide for it.
3.3.2.2. Only applicable for Voting of Directors
4. Quorum: Must be simple majority of outstanding voting shares entitled to vote represented at the meeting
5. Voting by Proxy: Granting another power to exercise shareholder's voting rights (SECTION 558)
5.1. Must be in writing (SECTION 559)
5.2. Revocable at anytime (SECTION 560)
5.2.1. Death/Incapacity does not revoke
5.2.2. Method of Revoking: Any of the following: (SECTION 560)
5.2.2.1. Notify proxy holder
5.2.2.2. Giving new proxy to someone else.
5.2.2.3. Personally attend meeting and voting the shares.
5.2.3. Irrevocable Proxy enforceable only if proxy has interest in the shares (SECTION 562).
5.3. Proxy Solicitation Rule 14a-1 et seq
5.3.1. Applies to oral/written proxy solicitation in connection with securities register under Section 12. (SECTION 569).
5.3.1.1. EXCEPTION: Does not apply to non-management solicitation of 10 or fewer shares (SECTION 570)
5.3.2. Scope of Proxy Rule
5.3.2.1. Rule 14a-3: requires concurrent or prior disclosure of all material facts concerning the called shareholder vote. (SECTION 578)--see also exam tip at p. 167
5.3.2.2. Periodic Disclosure Required
5.3.2.2.1. Annual Reports (SECTION 580)
5.3.2.2.2. Proxy Statements (SECTION 581)
5.3.3. Shareholder Proposal must be included in corporate materials if certain conditions are met: SEE FLOW CHART AT p. 168
5.3.3.1. Exception (SECTION 594)--SEE FLOW CHART AT p. 171.
5.3.4. Providing Shareholders List of Shareholders required if requested (SECTION 602)
5.3.5. Expenses Related to Proxy Contest
5.3.5.1. Corp may pay normal expenses of preparing and soliciting proxies to obtain quorum for annual meeting. SECTION 620)
5.3.5.2. Insurgent do not have right to reimbursement (SECTION 621)
5.3.6. Remedies for Violating Proxy Rules
5.3.6.1. Administrative: SEC instituted suit (SECTION 603)
5.3.6.2. Private Suite Under Rule 14a-9 (SECTION 604): MUST SHOW (See Table at p. 176)
5.3.6.2.1. Materiality: A substantial likelihood that disclosure of the truth or an committed fact would have been viewed by the reasonable investor as having significantly altered the total mix of information available.
5.3.6.2.2. Causation: The false and misleading statement caused the shareholder vote that the proxy solicited; usually satisfied on showing of materiality.
5.3.6.2.3. Standing: Must have been a shareholder when the vote was taken, but need not have granted a proxy on the basis of the misleading information.
5.3.6.2.4. Fault: At least negligence is required; some courts require scienter.