icitation."
2) Requirement of Full Disclosure - the proxy rules require full and accurate disclosure of all pertinent facts and the identities of all proxy participants, disclosure of compensation paid to certain officers and dirs, and disclosure of conflict-of-interest transactions involving more than $ 60, 000.
3) Inclusion of Shareholder Proposal - shareholder proposals must be included in corporate proxy materials if the proponent is a record owner or beneficial owner of at least 1% or $ 1000 worth of securities entitled to vote on the matter. The proposal must not exceed 500 words. p> I) Exceptions - a proposal need NOT be included if it: is not a proper subject for shareholder action, would be illegal, is false or misleading, seeks redress of a personal claim, relates to operations accounting to less than 5% of the corp's total assets and is not otherwise related to the corp's business, concerns a matter beyond the corp's power to effectuate, relates to ordinary business operations, relates to an election to office, is counter to a proposal submitted by the corp at the same meeting, is moot or duplicate, deals with the same subject matter as a very unsuccessful prior proposal, or relates to specific amounts of cash or stock dividends.
ii) Private right of action - a private right of action is available to a sh whose proposal was rejected by the corp on the ground that it fails within one of the exceptions.
iii) Providing shareholder lists - a sh has a right to obtain a list of shs or to have his communication included with the corporate proxy materials.
4) Remedies for violation of proxy rules - these include suit by the SEC to enjoin violations or to set aside an election and individual suits, class actions, or derivative suits by the shs (In a private suit, the P must show materiality and causation, but causation is normally presumed from materiality. Fairness to the corp is NOT a defense to a violation of proxy rules). The court may rescind corporate action resulting from a misleading proxy solicitation or award damages.
c) Expenses Incurred In Proxy Contests - corporate funds may be used by management with respect to reasonable proxy solicitation expenses incurred in order to obtain a quorum for the annual meeting or regarding controversy over corporate policy (as opposed to a personnel controversy). The corp may, with sh approval, voluntarily pay the reasonable expenses to insurgents who win a proxy contest involving policy.
5.OTHER METHODS TO COMBINE VOTES FOR CONTROL (CLOSE CORPORATIONS) - other methods include shareholder voting agreements which may be enforced by specific performance, agreements regarding greater-than-majority approval, shareholder agreements binding the discretion of dirs, and voting trusts.
B.RESTRICTIONS ON TRANSFER OF SHARES - although most frequently used in close corps, stock transfer restrictions may also be imposed by la...
