Also known as: proxy statement · proxy stmt · proxy · proxies
Written by attorneys · grounded in primary & secondary sources — see below
A disclosure document that a corporation must furnish to shareholders when soliciting their proxies to vote at a shareholders meeting. The document supplies information about the matters to be voted on so that shareholders can make informed decisions whether to grant a proxy and how to direct the proxy holder to vote.
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Paragon Construction mails its annual proxy statement before the meeting to elect directors. Paul Peterson reviews the disclosures, then signs an appointment form authorizing Patricia Patel to vote his shares. The inspector of elections receives the form before the meeting and counts Patel's vote as Peterson's.
Preston Pratt reviews a corporate proxy statement for an upcoming merger vote while deployed overseas. He sends a signed writing authorizing Pedro Pacheco to stand in as proxy at the shareholders meeting. The corporation accepts the proxy appointment and counts the vote.
Prosperity Investments owns five percent of Pioneer Energy and nominates two directors. Pioneer Energy's bylaws require inclusion of shareholder nominees. The corporation places the nominees on the proxy statement and form of proxy sent to all shareholders before the annual meeting.
Progressive Healthcare's bylaws require the company to reimburse reasonable expenses a shareholder incurs when soliciting proxies for director elections. After a successful contest, the board approves payment of the shareholder's printing and mailing costs incurred before the record date.
TSC Industries issues a proxy statement recommending a merger with National Industries. The statement omits that National already owns thirty-four percent of TSC and that TSC's founder sold his shares to National. Minority shareholders challenge the omission as material.
J. I. Case Co. solicits proxies for a merger without disclosing that management manipulated the market price of the target stock. A shareholder who granted a proxy and later discovered the manipulation brings a private suit alleging violation of the proxy rules.
A corporation must furnish a proxy statement whenever it solicits proxies for a shareholders meeting at which directors will be elected or other matters requiring shareholder approval will be voted upon. The statement supplies the information shareholders need to decide whether to grant a proxy and how to direct the vote.
When a corporation solicits proxies for director elections, its bylaws may require the proxy statement and form of proxy to include one or more individuals nominated by shareholders in addition to the board's nominees. The corporation must follow the procedures and conditions set out in the bylaws.
…v. United States, 406 U. S., at 153-154. Similarly, we did not require proof that material omissions or misstatements in a proxy statement decisively affected voting, because the proxy solicitation itself, rather than the defect in the solicitation materials, served as an essential link in the transaction. See Mills v.…
…as a most effective weapon in the enforcement of the proxy requirements. The Commission advises that it examines over 2,000 proxy statements
…Redish, The Value of Free Speech, 130 U. Pa. L. Rev. 591, 594 (1982). Corporate speech, however, is derivative speech, speech by proxy
…proxy rules promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 bar the use of
…the Merger was then put before MFW’s stockholders for a vote. On November 18, 2011, the stockholders were provided with a proxy statement
Yes. A corporation's bylaws may require reimbursement of reasonable expenses a shareholder incurs when soliciting proxies or consents in a director election. The reimbursement obligation is subject to any procedures and conditions stated in the bylaws and does not apply to elections with a record date before the bylaw's adoption.
An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. The test focuses on whether the disclosure of the omitted fact would have significantly altered the total mix of information made available to shareholders.
Yes. A shareholder who grants a proxy in reliance on a materially false or misleading proxy statement may bring a private action for damages or injunctive relief. Private enforcement supplements Commission action and serves as an effective means of ensuring compliance with the proxy requirements.